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Deluca Manufacturing prepared the following cost control report for the prior month: Planning Budget Actual Results...

Deluca Manufacturing prepared the following cost control report for the prior month: Planning Budget Actual Results Variances Direct labor hours 30,000 33,000 Direct materials $45,000 $55,000 $10,000 U Direct labor wages $480,000 $520,000 $40,000 U Maintenance $125,000 $136,000 $11,000 U Utilities $82,000 $86,000 $4,000 U Rent $65,000 $65,000 $0 Depreciation $27,000 $27,000 $0 Total: $824,000 $889,000 $65,000 U Direct materials and direct labor wages are variable costs; rent and depreciation are fixed costs; and maintenance and utilities are mixed costs. The fixed component of the budgeted maintenance cost is $35,000; the fixed component of the budgeted utilities cost is $13,000. 7. What is the spending variance for Utilities?

Please show me the work the calculations how you will solve this problem step by step

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Expert Solution

Ans: Budgeted variable cost for 30000 hours = $ 82000-13000 = $ 69000

       Budgeted variable cost for 33000 hours = $ 69000x(33000/30000)

                                                                = $ 75900

         Total Budgeted Cost = $ 75900+13000= $ 88900

Spending Variance = Budgeted Cost-Actual Cost

                             = $ 88900- 86000

                              = $ 2900(F)

ekkarill92 answered 1 year ago
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