Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 5,500 units, but its actual level of activity was 5,460 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Revenue Direct labor Direct materials Manufacturing overhead Selling and administrative expenses Total expenses Actual results for June: Revenue Direct labor Fixed element Variable element per per month $ 0 unit $ 28.00 $ 0 $ 3.50 0 9.60 38,600 1.20 24,200 0.30 $ 62,800 $ 14.60 $ 158,886 $ 18,578 Direct materials Manufacturing overhead Selling and administrative expenses $ 50,166 $ 45,057 $ 25,933 The activity variance for net operating income in June would be closest to: Multiple Choice о $536 F О $536 U $8,252 U О $8,252 F
Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 5,500 units, but its actual level of activity was 5,460 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Revenue Direct labor Direct materials Manufacturing overhead Selling and administrative expenses Total expenses Actual results for June: Revenue Direct labor Fixed element Variable element per per month $ 0 unit $ 28.00 $ 0 $ 3.50 0 9.60 38,600 1.20 24,200 0.30 $ 62,800 $ 14.60 $ 158,886 $ 18,578 Direct materials Manufacturing overhead Selling and administrative expenses $ 50,166 $ 45,057 $ 25,933 The activity variance for net operating income in June would be closest to: Multiple Choice о $536 F О $536 U $8,252 U О $8,252 F
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Question
None
Transcribed Image Text:Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports.
During June, the company budgeted for 5,500 units, but its actual level of activity was 5,460 units. The company has provided the following data concerning the
formulas used in its budgeting and its actual results for June:
Data used in budgeting:
Revenue
Direct labor
Direct materials
Manufacturing overhead
Selling and administrative expenses
Total expenses
Actual results for June:
Revenue
Direct labor
Fixed element
Variable
element per
per month
unit
$ 0
$ 28.00
$ 0
$ 3.50
0
9.60
38,600
1.20
24,200
0.30
$ 62,800
$ 14.60
$ 158,886
$ 18,578
Direct materials
Manufacturing overhead
Selling and administrative expenses
The activity variance for net operating income in June would be closest to:
$ 50,166
$ 45,057
$ 25,933
Multiple Choice
$536 F
$536 U
$8,252 U
$8,252 F
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education