Question

Famtrk153 Corp. is a popular car-wash operation that measures its activity in terms of number of cars washed. Last month, the budgeted level of activity was 1,140 cars washed and the actual level of activity was 1,130 cars washed. The cost formula for the washing expenses is $3.80 per car washed plus $21,000 per month. (ID#11659) The actual Famtrk153's washing expense was $21,700. Q) What was the Famtrk153's spending variance for the washing expenses last month?

Answer 1

the spending variance is $3,594 favorable

Step-by-step explanation:

The computation of the spending variance is as follows

Budgeted Expense is

= 1,130 cars × $3.80 per car + $21,000

= $4,294 + $21,000

= $25,294

And, the actual expese is $21,700

So, the spending variance is

= $25,294 - $21,700

= $3,594

Hence, the spending variance is $3,594 favorable