Ingrum Framing\'s cost formula for its supplies cost is $1,060 per month plus $1
ID: 2474799 • Letter: I
Question
Ingrum Framing's cost formula for its supplies cost is $1,060 per month plus $16 per frame. For the month of June, the company planned for activity of 616 frames, but the actual level of activity was 606 frames. The actual supplies cost for the month was $10,300. The spending variance for supplies cost in June would be closest to:
$616 U
$456 U
$456 F
$616 F
Ingrum Framing's cost formula for its supplies cost is $1,060 per month plus $16 per frame. For the month of June, the company planned for activity of 616 frames, but the actual level of activity was 606 frames. The actual supplies cost for the month was $10,300. The spending variance for supplies cost in June would be closest to:
Explanation / Answer
The spending variance for supplies cost in June =Flexible supply cost-Actual supply cost=606*16+1,060)-10,300= $456 F