Rodriques Tile Installation Corporation measures its activity in terms of square

Question

Rodriques Tile Installation Corporation measures its activity in terms of square feet of tile installed. Last month, the budgeted level of activity was 1,630 square feet and the actual level of activity was 1,720 square feet. The company's owner budgets for supply costs, a variable overhead cost, at $3.40 per square foot. The actual supply cost last month was $6,750. In the company's flexible budget performance report for last month, what would have been the variance for supply costs? (Points : 2) $353 U $306 U $902 U $1,208 U

Explanation / Answer

Supply costs variance:

= Budgeted costs of actual activity-Actual cost of actual activity

= 1,720×$3.40-$6,750

= $902 Unfavorable

Hence, correct option is $902 U

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