Courington Detailing's cost formula for its materials and supplies is $2,090 per month plus $15 per vehicle. For the month of August, the company planned for activity of 89 vehicles, but the actual level of activity was 49 vehicles. The actual materials and supplies for the month was $2,660. The spending variance for materials and supplies in August would be closest to: Multiple Choice $765 F $765 U $165 U
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
14.
Courington Detailing's cost formula for its materials and supplies is $2,090 per month plus $15 per vehicle. For the month of August, the company planned for activity of 89 vehicles, but the actual level of activity was 49 vehicles. The actual materials and supplies for the month was $2,660.
The spending variance for materials and supplies in August would be closest to:
-
$765 F
-
$765 U
-
$165 U
-
$165 F
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