Loggin Midwifery's cost formula for its wages and salaries is $2,380 per month plus $231 per birth. For the month of April, the company planned for activity of 100 births, but the actual level of activity was 102 births. The actual wages and salaries for the month was $25,510. The spending variance for wages and salaries in April would be closest to:
A)$30 F
B)$432 U
C)$30 U
D)$432 F

Question

Quizplus · Accepted Answer

The budgeted amount for April's wages and salaries is:
$2,380 per month + ($231 per birth x 100 births) = $25,580

The actual amount spent in April was $25,510.

The spending variance is calculated as:

Actual amount spent - Budgeted amount

$25,510 - $25,580 = -$70

Since the actual amount spent is less than the budgeted amount, the variance is unfavorable or "U" for $70.

Therefore, the answer is D) $432 F, as it is the closest unfavorable or "F" variance option.

Loggin Midwifery's Cost Formula for Its Wages and Salaries Is