Medlar Corporation's static planning budget for June appears below. The company bases its budgets on machine-hours. In June, the actual number of machine-hours was 9,300, the actual supplies cost was $19,760, the actual power cost was $35,720, the actual salaries cost was $27,130, and the actual equipment depreciation was $39,430.
The spending variance for power cost in the flexible budget performance report for the month should be:
A) $1,900 F
B) $1,900 U
C) $380 U
D) $380 F

Question

Medlar Corporation's static planning budget for June appears below. The company bases its budgets on machine-hours.  In June, the actual number of machine-hours was 9,300, the actual supplies cost was $19,760, the actual power cost was $35,720, the actual salaries cost was $27,130, and the actual equipment depreciation was $39,430.
The spending variance for power cost in the flexible budget performance report for the month should be:
A) $1,900 F 
B) $1,900 U 
C) $380 U 
D) $380 F

Quizplus · Accepted Answer

11eacbfc_c5b5_4642_8ffe_fbf1a5db1f0d_TB7552_00 Because the actual expense is greater than the flexible budget, the variance is unfavorable (U).

Medlar Corporation's Static Planning Budget for June Appears Below