Manter 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 6,900 units, but its actual level of activity was 6,940 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 direct labor in June would be closest to:
A) $200 U
B) $200 F
C) $490 U
D) $490 F

Question

Manter 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 6,900 units, but its actual level of activity was 6,940 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 direct labor in June would be closest to:
A) $200 U 
B) $200 F 
C) $490 U 
D) $490 F

Quizplus · Accepted Answer

11eacbfc_c59c_8e6c_8ffe_85d8d26a77e0_TB7552_00 Because the flexible budget is greater than the planning budget, the variance is unfavorable (U).

Manter Corporation Manufactures and Sells a Single Product