Question

Petrus Framing's cost formula for its supplies cost is $1,750 per month plus $9 per frame. For the month of March, the company planned for activity of 615 frames, but the actual level of activity was 622 frames. The actual supplies cost for the month was $7,850. The activity variance for supplies cost in March would be closest to: Multiple Choice $63 U $565 U $565 F

Answer 1

$ 565 Unfavorable

Step-by-step explanation:

The actual supplies cost for the month was $7,850

The planned cost supplies for the month would be = $1750 + 9(615)= $1750 +5535= $ 7285

Activity Variance= Actual Supplies Cost- Planned Supplies Cost

Activity Variance= $7,850-$ 7285= $ 565 Unfavorable

An activity variance is a measure of the difference in the planned budget amounts and actual amounts. It is calculated for different activity levels.