Brong Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for March. Fixed Element per MonthVariable Element per Container RefurbishedActual Total for MarchRevenue $ 5,900$ 108,300Employee salaries and wages$ 49,500$ 900$ 66,000Refurbishing materials $ 500$ 9,500Other expenses$ 40,300 $ 39,800When the company prepared its planning budget at the beginning of March, it assumed that 22 containers would have been refurbished. However, 18 containers were actually refurbished during March.The spending variance for “Employee salaries and wages” for March would have been closest to: $300 F $300 U $3,300 F $3,300 U

Variance analysis is a process of comparing actual data with the budgeted data. It is a part of…

Answered: Brong Corporation is a shipping…

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter23: Flexible Budgeting (flexbud)

Section: Chapter Questions

Problem 1R

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Brong Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for March.

	Fixed Element per Month	Variable Element per Container Refurbished	Actual Total for March
Revenue		$ 5,900	$ 108,300
Employee salaries and wages	$ 49,500	$ 900	$ 66,000
Refurbishing materials		$ 500	$ 9,500
Other expenses	$ 40,300		$ 39,800

When the company prepared its planning budget at the beginning of March, it assumed that 22 containers would have been refurbished. However, 18 containers were actually refurbished during March.

The spending variance for “Employee salaries and wages” for March would have been closest to:

		$300 F
		$300 U
		$3,300 F
		$3,300 U

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