Question

Corporation conducts get-rich-quickly workshops and uses two measures of activity, classes and students in the cost formulas in its internal financial and operating reports The cost formula for workshops is $540 per month plus $103 per class plus $34 per student Dev.774 expected its activity in January to be 11 classes and 120 students, but the actual activity was 6 classes and 125 students

The actual cost for workshops in January was $5,230.
What was Pexura774's spending variance for workshops in January?
a. $178 F
b. $523 F
c. $178 U
d. $523 U

Answer 1

a. $178(F)

Step-by-step explanation:

Overhead spending variance = (Actual hours worked * Actual overhead rate) - (Actual hours worked × Standard overhead rate)

Overhead spending variance = Actual Cost- Standard Cost for Actual Output

Overhead spending variance = 5230 - 5408

Overhead spending variance = 178 (Favorable).