Trevorrow Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgetsand performance reports. During June, the company budgeted for5,600 units, but its actual level of activity was 5,560 units. Thecompany has provided the following data concerning the formulasused in its budgeting and its actual results for June:
Data used in budgeting:
| Fixed element per month | Variable element per unit |
| Revenue | | - | | $ | 29.00 |
| | | | | |
| Direct labor | $ | 0 | | $ | 3.60 |
| Direct materials | | 0 | | | 9.70 |
| Manufacturing overhead | | 38,700 | | | 1.30 |
| Selling and administrative expenses | | 24,300 | | | 0.40 |
| Total expenses | $ | 63,000 | | $ | 15.00 |
|
Actual results for June:
| |
| Revenue | $ | 165,382 |
| Direct labor | $ | 19,481 |
| Direct materials | $ | 51,677 |
| Manufacturing overhead | $ | 45,828 |
| Selling and administrative expenses | $ | 26,554 |
|
The overall revenue and spending variance (i.e., the variancefor net operating income in the revenue and spending variancecolumn on the flexible budget performance report) for June would beclosest to:
Multiple Choice
A $6,442 F
B $6,442 U
C $7,002 F
D $7,002 U
PLEASE SHOW STEPS
