Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 7,400 units, but its actual level of activity was 7,350 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Revenue Direct labor Direct materials Manufacturing overhead Selling and administrative expenses Total expenses Actual results for May: Revenue Direct labor Direct materials Fixed element per Variable element month per unit $ $ Manufacturing overhead Selling and administrative expenses $ $ $ $ $ - 0 0 31,000 26,200 57,200 257,800 39,870 99,890 47,000 30,540 The activity variance for direct labor in May would be closest to: Multiple Choice $275 F $830 F $830 U $275 U $34.90 $ 5.50 13.40 2.40 0.20 $21.50
Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 7,400 units, but its actual level of activity was 7,350 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Revenue Direct labor Direct materials Manufacturing overhead Selling and administrative expenses Total expenses Actual results for May: Revenue Direct labor Direct materials Fixed element per Variable element month per unit $ $ Manufacturing overhead Selling and administrative expenses $ $ $ $ $ - 0 0 31,000 26,200 57,200 257,800 39,870 99,890 47,000 30,540 The activity variance for direct labor in May would be closest to: Multiple Choice $275 F $830 F $830 U $275 U $34.90 $ 5.50 13.40 2.40 0.20 $21.50
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:Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of activity in its
budgets and performance reports. During May, the company budgeted for 7,400 units, but its actual level of activity was
7,350 units. The company has provided the following data concerning the formulas used in its budgeting and its actual
results for May:
Data used in budgeting:
Revenue
Direct labor
Direct materials
Manufacturing overhead
Selling and administrative
expenses
Total expenses
Actual results for May:
Revenue
Direct labor
Direct materials
Fixed element per
month
$
$
Manufacturing overhead
Selling and administrative expenses
$
$
$
$
$
Variable element
per unit
0
0
31,000
26,200
57,200
257,800
39,870
99,890
47,000
30,540
The activity variance for direct labor in May would be closest to:
Multiple Choice
$275 F
$830 F
$830 U
$275 U
$34.90
$ 5.50
13.40
2.40
0.20
$ 21.50
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