Question

Photo Framing's cost formula for its supplies cost is $1,070 per month plus $17 per frame. For the month of November, the company planned for activity of 617 frames, but the actual level of activity was 607 frames. The actual supplies cost for the month was $11,700. The spending variance for supplies cost in November would be closest to:

Answer 1

$311 unfavorable

Step-by-step explanation:

The computation of the spending variance is shown below:

= Actual supplies cost - flexible supplies cost

where

Actual supplies cost is $11,700

And, the flexible supplies cost would be

= Actual level of activity × price per frame + supplies cost per month

= 607 frames ×$17 + $1,070

= $10,319 + $1,070

= $11,389

Now put these values to the above formula

So, the value would equal to

= $11,700 - $11,389

= $311 unfavorable