Ingrum Framing's cost formula for its supplies cost is $1,030 per month plus $13 per frame. For the month of June, the company planned for activity of 613 frames, but the actual level of activity was 603 frames. The actual supplies cost for the month was $8,000. The spending variance for supplies cost in June would be closest to:
|
$999 F | |
→ | $869 F |
$999 U | |
Actual results | $ 8,000 |
Flexible budget ($1,030 + $13 × 603) | 8,869 |
Spending variance |
$ 869
|
Because the actual expense is lesser than the flexible budget, the variance is favorable (F).
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