Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure...
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Accounting
Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 5,800 units, but its actual level of activity was 5,760 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June:
Data used in budgeting:
Fixed element per month
Variable element per unit
Revenue
-
$
29.20
Direct labor
$
0
$
3.80
Direct materials
0
9.90
Manufacturing overhead
38,900
1.50
Selling and administrative expenses
24,500
0.30
Total expenses
$
63,400
$
15.50
Actual results for June:
Revenue
$
170,258
Direct labor
$
21,347
Direct materials
$
54,759
Manufacturing overhead
$
47,430
Selling and administrative expenses
$
26,268
The activity variance for net operating income in June would be closest to:
Multiple Choice
$548 F
$548 U
$4,394 U
$4,394 F
Answer & Explanation
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