Assume the following information for one of a company's variable expenses: • The actual amount of the expense is $8,300. • The planned level of activity is 1,000 hours. • The spending variance is $200 unfavorable. • The cost formula is $9.00 per hour. The activity variance must be: Multiple Choice O $600 U. $900 F. $900 U. $600 F.
Assume the following information for one of a company's variable expenses: • The actual amount of the expense is $8,300. • The planned level of activity is 1,000 hours. • The spending variance is $200 unfavorable. • The cost formula is $9.00 per hour. The activity variance must be: Multiple Choice O $600 U. $900 F. $900 U. $600 F.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 37BEB: Use the following information to complete Brief Exercises 10-36 and 10-37: Ambient Inc. produces...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Assume the following information for one of a company's variable expenses:
• The actual amount of the expense is $8,300.
• The planned level of activity is 1,000 hours.
• The spending variance is $200 unfavorable.
• The cost formula is $9.00 per hour.
The activity variance must be:
Multiple Choice
$600 U.
$900 F.
$900 U.
$600 F.
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