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 overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for June would be closest to:
A) $9,256 U
B) $9,256 F
C) $9,780 U
D) $9,780 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 overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for June would be closest to:
A) $9,256 U 
B) $9,256 F 
C) $9,780 U 
D) $9,780 F

Quizplus · Accepted Answer

11eacbfc_c599_5a00_8ffe_2de1b0ff9bb5_TB7552_00 11eacbfc_c599_5a01_8ffe_bb529b80b8d1_TB7552_00 Because the actual net operating income is greater than the flexible budget, the variance is favorable (F).

Trevorrow Corporation Manufactures and Sells a Single Product