Moncrief Corporation bases its budgets on machine-hours. The company's static planning budget for July appears below: Budgeted number of machine-hours 1,000 Supplies (@ $8.60 per machine-hour) $ 8,600 Power (@ $8.80 per machine-hour) 8,800 Salaries 11,300 Equipment depreciation 9,900 Total $ 38,600 Actual results for the month were: Actual number of machine-hours 1,200 Supplies $ 10,290 Power $ 10,860 Salaries $ 11,690 Equipment depreciation $ 9,990 The spending variance for supplies costs in the flexible budget performance report for the month should be: Multiple Choice $30 F $1,690 F $1,690 U $30 U

Question

Business

Braeden Peters

3 November, 08:45

Moncrief Corporation bases its budgets on machine-hours. The company's static planning budget for July appears below: Budgeted number of machine-hours 1,000 Supplies (@ $8.60 per machine-hour) $ 8,600 Power (@ $8.80 per machine-hour) 8,800 Salaries 11,300 Equipment depreciation 9,900 Total $ 38,600 Actual results for the month were: Actual number of machine-hours 1,200 Supplies $ 10,290 Power $ 10,860 Salaries $ 11,690 Equipment depreciation $ 9,990 The spending variance for supplies costs in the flexible budget performance report for the month should be: Multiple Choice $30 F $1,690 F $1,690 U $30 U

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Answers (1)

Know the Answer?

Mylie Chan · Answer 1

The correct answer is A.

Explanation:

Giving the following information:

Moncrief Corporation bases its budgets on machine-hours. The company's static planning budget for July appears below: Budgeted number of machine-hours 1,000 Supplies (@ $8.60 per machine-hour) $ 8,600

Actual results for the month were: Actual number of machine-hours 1,200 Supplies $ 10,290

Manufacturing overhead spending variance = (standard rate - actual rate) * actual quantity

Manufacturing overhead spending variance = (8.60 - 8.575) * 1,200 = 30 favorable