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Lenci Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,120 units, but its actual level of activity was 5,070 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May:
Data used in budgeting:
Fixed element per month Variable element per unit
Revenue - $ 40.30
Direct labor $ 0 $ 6.20
Direct materials 0 16.40
Manufacturing overhead 42,200 2.00
Selling and administrative expenses 23,400 .90
Total expenses $ 65,600 $ 25.50
Actual results for May:
Revenue $ 198,510
Direct labor $ 29,265
Direct materials $ 80,965
Manufacturing overhead $ 51,905
Selling and administrative expenses $ 23,380
The spending variance for manufacturing overhead in May would be closest to:_________

Sagot :

Tundexi

Answer:

$435

Explanation:

Spending variance for manufacturing overhead = Manufacturing overheads as per Flexible budget - Actual Manufacturing overheads incurred

Spending variance for manufacturing overhead = [$42,200+$2.00*5,070] -  $51,905

Spending variance for manufacturing overhead = $52,340 - $51,905

Spending variance for manufacturing overhead = $435

So, the spending variance for manufacturing overhead in May is closest to $435.

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