25. Meredith Corporation manufactures and sells a single product. The company us

Question

25. Meredith Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During April, the company budgeted for 7,600 units, but its actual level of activity was 7,570 units. The company has provided the following data concerning in its budgeting and its actual results for April: Data used in budgeting: the formulas used Fixed Variable element per element per unit S35.20 month Revenue an Direct materials.. Manufacturing overhead Selling and administrative expenses Total expenses S0S5.40 15.10 1.80 48,500 $69.400 $2280 Actual results for April: Revenue.. Direct labor. Direct materials... Manufacturing overhead Selling and administrative expenses. S277,604 $42,018 $109,227 $62,176 S25,345 The activity variance for direct labor in April would be closest to: A. $162 F B. $162 U C. $978 U D. $978 F

Explanation / Answer

Direct labor in flexible budget = 7600*5.4= 41040 Direct labor in planning budget = 7570*5.4= 40878 Activity variance = 41040-40878 = $162 Favorable Option A is correct

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