In: Finance
Requirement 2:
Revise the data in your worksheet to reflect the results for the subsequent period as shown below:
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a. What is the activity variance for revenue? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance)).
b. What is the spending variance for the cost of ingredients? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance)).
c. What is spending variance for wages and salaries? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance)).
d. What is spending variance for total expenses? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance)).
a. | ||
Activity variance for revenue = ( Actual activity - Planning budget activity ) * Standard revenue per unit = ( 1800 - 1700 ) * 16.50 = | 1650 | F |
b. | ||
Actual cost of ingredients | 11460 | |
(-) Actual activity * Standard cost of ingredients per unit = 1800 * 6.25 = | 11250 | |
spending variance for the cost of ingredients | 210 | U |
c. | ||
Actual wages and salaries | 10250 | |
(-) Standard wages and salaries | 10400 | |
spending variance for wages and salaries | 150 | F |
d. | ||
Actual | Standard cost for actual activity | |
Cost of ingredients | 11460 | 11250 |
Wages and salaries | 10250 | 10400 |
Utilities | 1155 | 1160 |
Rent | 2200 | 2200 |
Miscellaneous | 2085 | 2040 |
Total expense | 27150 | 27050 |
Actual total expense | 27150 | |
(-) Standard total cost for actual activity | 27050 | |
spending variance for total expenses | 100 | U |