Question
In: Accounting
Goldman uses meals served as the activity level for its fish house. The company has a...
Goldman uses meals served as the activity level for its fish house. The company has a cost formula for ingredients of $600 + $.80q. The actual cost of ingredients for June was $2,240 and the restaurant served 1,700 meals. The budget was based on serving 1,800 meals.
What is the spending variance for June?
Solutions
Expert Solution
Budgeted Cost formula = $600 + $.80 q
Hence,
For 1700 meals , q = 1700
Budgeted Cost = $600 + $.80 x 1700 = $1,960
Actual Cost = $2,240
spending variance = Budgeted Cost - Actual
Cost
= $1,960 - $2,240
= - $280
= $280 Unfavorable
Hence spending variance is $280 Unfavorable
ekkarill92 answered 1 year agoRelated Solutions
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