Piechocki Corporation manufactures and sells a single product. The company uses units as the measure...
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Accounting
Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 7,200 units, but its actual level of activity was 7,150 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May:
Data used in budgeting:
Fixed element per month
Variable element per unit
Revenue
-
$
34.70
Direct labor
$
0
$
6.70
Direct materials
0
13.20
Manufacturing overhead
42,000
2.20
Selling and administrative expenses
26,000
0.70
Total expenses
$
68,000
$
22.80
Actual results for May:
Revenue
$
249,300
Direct labor
$
48,110
Direct materials
$
95,680
Manufacturing overhead
$
46,000
Selling and administrative expenses
$
30,520
The spending variance for direct materials in May would be closest to:
Answer & Explanation
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