Harold Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 7,900 units, but its actual level of activity was 7,860 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Fixed element per month Variable element per unit Revenue $0 $ 39.80 Direct labor $0 $ 7.70 Direct materials 0 18.00 Manufacturing overhead 38,200 1.50 Selling and administrative expenses 27,400 0.50 Total expenses $ 65,600 $ 27.70 Actual results for March: Revenue $ 297,318 Direct labor $ 59,962 Direct materials $ 135,850 Manufacturing overhead $ 51,370 Selling and administrative expenses $ 31,950 The spending variance for direct materials in March would be closest to: Multiple Choice $5,630 F $6,350 F $5,630 U
Harold Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 7,900 units, but its actual level of activity was 7,860 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Fixed element per month Variable element per unit Revenue $0 $ 39.80 Direct labor $0 $ 7.70 Direct materials 0 18.00 Manufacturing overhead 38,200 1.50 Selling and administrative expenses 27,400 0.50 Total expenses $ 65,600 $ 27.70 Actual results for March: Revenue $ 297,318 Direct labor $ 59,962 Direct materials $ 135,850 Manufacturing overhead $ 51,370 Selling and administrative expenses $ 31,950 The spending variance for direct materials in March would be closest to: Multiple Choice $5,630 F $6,350 F $5,630 U
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Harold Corporation manufactures and sells a
single product. The company uses units as
the measure of activity in its budgets and
performance reports. During March, the
company budgeted for 7,900 units, but its
actual level of activity was 7,860 units. The
company has provided the following data
concerning the formulas used in its budgeting
and its actual results for March: Data used in
budgeting: Fixed element per month Variable
element per unit Revenue $0 $ 39.80 Direct
labor $0 $ 7.70 Direct materials 0 18.00
Manufacturing overhead 38,200 1.50 Selling
and administrative expenses 27,400 0.50
Total expenses $ 65,600 $ 27.70 Actual results
for March: Revenue $ 297,318 Direct labor $
59,962 Direct materials $ 135,850
Manufacturing overhead $ 51,370 Selling and
administrative expenses $ 31,950 The
spending variance for direct materials in
March would be closest to: Multiple Choice
$5,630 F $6,350 F $5,630 U
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