Sleepy's mattress factory's budgeted sales were 500 mattresses with a budgeted sales price of $300 and a budgeted unit variable cost of $140. Actual sales for the month of January were 450 mattresses, actual sales price was $320, and actual unit variable cost was $150. Calculate the activity variance for January. $9,000 Favorable $9,000 Unfavorable $8,000 Favorable $8,000 Unfavorable
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.
Sleepy's mattress factory's budgeted sales were 500 mattresses with a budgeted sales price of $300 and a budgeted unit variable cost of $140. Actual sales for the month of January were 450 mattresses, actual sales price was $320, and actual unit variable cost was $150. Calculate the activity variance for January.
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$9,000 Favorable
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$9,000 Unfavorable
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$8,000 Favorable
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$8,000 Unfavorable
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