Question

Crystal Corp. had a spending variance of $2,460 unfavorable and actual spending of $46,245. Which of the following must be true?

I. Crystal had flexible spending of $43,785.

II. Crystal actually spent more than what was recorded in the flexible budget.

III. Crystal produced more units than was planned in the planning budget.

Answer 1

Option II. Crystal actually spent more thanwhat was recoreded in the flexible budget

he had an unfavourable variance of 2460 that means he actually spend 2460 more than flexible budget

A spending variance is the difference between the actual amount of a particular expense and the expected (or budgeted) amount of an expense. To understand what variable overhead spending variance is, it helps to know what a variable overhead is

Revenue and spending variances (sometimes called flexible budget variances) are the differences between the flexible budget and the actual results and are caused by differences in the revenue per unit, cost per unit and/or the amount of cost incurred