Assume that a company provided the following cost formulas for three of its expenses (where a refers to the number of hours worked Rent (fixed) Supplies (variable) Utilities (mixed) Multiple Choice The company's planned level of activity was 2.000 hours and its actual level of activity was 1,900 hours. The actual amount of utilities expense for the period was $1,700. What is the spending variance for utilities expense? $125 U $125F $50 U $ 3,000 $50 F $ 4.000 $ 150+ $0.75q
Assume that a company provided the following cost formulas for three of its expenses (where a refers to the number of hours worked Rent (fixed) Supplies (variable) Utilities (mixed) Multiple Choice The company's planned level of activity was 2.000 hours and its actual level of activity was 1,900 hours. The actual amount of utilities expense for the period was $1,700. What is the spending variance for utilities expense? $125 U $125F $50 U $ 3,000 $50 F $ 4.000 $ 150+ $0.75q
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Assume that a company provided the following cost formulas for three of its expenses (where a refers to the number of hours worked
$3,000
Rent (fixed)
Supplies (variable)
Utilities (mixed)
The company's planned level of activity was 2,000 hours and its actual level of activity was 1,900 hours. The actual amount of utilities expense for the
period was $1,700. What is the spending variance for utilities expense?
Multiple Choice
$125 U
$125 F
$50 U
$ 4.000
$ 150+ $0.75q
$50 F
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