Question

Petrus Framing's cost formula for its supplies cost is $1,800 per month plus $11 per frame. For the month of March, the company planned for activity of 620 frames, but the actual level of activity was 626 frames. The actual supplies cost for the month was $8,900. The activity variance for supplies cost in March would be closest to:______.a. $99 F.b. $454 F.c. $454 U.d. $99 U.

Answer 1

$66 Unfavorable

Step-by-step explanation:

Budgeted activity = (620*11) + 1,800 = 6820 + 1,800 = $8,620

Flexible activity = (626*11)+1,800 = 6,886 + 1,800= $8,686

Activity variance = $8,620 - $8,686 = $66 Unfavorable