Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 6,200 units, but its actual level of activity was 6,160 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting:
Actual results for June:
The activity variance for net operating income in June would be closest to:
A) $524 F
B) $524 U
C) $9,256 U
D) $9,256 F

Question

Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 6,200 units, but its actual level of activity was 6,160 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting:
 Actual results for June:
 The activity variance for net operating income in June would be closest to:
A) $524 F 
B) $524 U 
C) $9,256 U 
D) $9,256 F

Quizplus · Accepted Answer

11eacbfc_c598_e4cc_8ffe_0b0a9a74cb2d_TB7552_00 11eacbfc_c598_e4cd_8ffe_6377e2d1c6b4_TB7552_00 Because the flexible budget net operating income is less than the planning budget, the variance is unfavorable (U).

Trevorrow Corporation Manufactures and Sells a Single Product