Question

Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of...

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 6,900 units, but its actual level of activity was 6,850 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:

Fixed element per month Variable element per unit
Revenue - $ 34.40
Direct labor $ 0 $ 6.40
Direct materials 0 14.00
Manufacturing overhead 39,000 1.90
Selling and administrative expenses 25,700 4.00
Total expenses $ 64,700 $ 26.30

Actual results for May:

Revenue $ 236,700
Direct labor $ 43,370
Direct materials $ 96,930
Manufacturing overhead $ 44,500
Selling and administrative expenses $ 30,490

The spending variance for direct materials in May would be closest to:

Multiple Choice

$1,030 F

$1,030 U

$330 U

$330 F

Homework Answers

Answer #1

Actual output = 6,850 units

Actual cost of direct materials = $96,930

Standard direct materials cost per unit = $14

Standard direct material cost for actual output = Actual output * standard direct materials cost per unit = 6,850 units * $14 = $95,900

Direct material spending variance = Standard cost - Actual cost = $95,900 - $96,930 = $1,030 U

As the actual cost is more than standard cost, the variance is unfavorable.

So, the answer is $1,030 U [ option 2 ]

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of...
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 6,400 units, but its actual level of activity was 6,350 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: Fixed element per month Variable element per unit Revenue - $ 33.90 Direct labor $ 0...
Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of...
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: Fixed element per month Variable element per unit Revenue - $ 34.90 Direct labor $ 0...
Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of...
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 7,300 units, but its actual level of activity was 7,250 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: Fixed element per month Variable element per unit Revenue - $ 34.80 Direct labor $ 0...
Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of...
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 6,800 units, but its actual level of activity was 6,750 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: Fixed element per month Variable element per unit Revenue - $ 34.30 Direct labor $ 0...
1. Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure...
1. 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 6,200 units, but its actual level of activity was 6,160 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: Fixed element per month Variable element per unit Revenue - $ 27.80 Direct labor $...
Neubert Corporation manufactures and sells a single product. The company uses units as the measure of...
Neubert Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During December, the company budgeted for 5,300 units, but its actual level of activity was 5,340 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting: Fixed Element per Month Variable element per unit Revenue - $ 30.00 Direct labor $ 0...
Lehnertz Corporation manufactures and sells a single product. The company uses units as the measure of...
Lehnertz Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During February, the company budgeted for 7,100 units, but its actual level of activity was 7,150 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting: Fixed element per month Variable element per unit Revenue − $ 27.70 Direct labor $ 0...
Trevorrow Corporation manufactures and sells a single product. the company uses units as the measure of...
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 5,800 units, but its actual level of activity was 5,760 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: $29.20 Variable element per unit Direct Labor $3.80 Variable element per unit Direct Materials: $9.90...
Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of...
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 6,200 units, but its actual level of activity was 6,160 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Fixed element per month Variable element per unit Revenue - $ 27.80 Direct labor $ 0 $ 3.10 Direct materials...
Lenci Corporation manufactures and sells a single product. The company uses units as the measure of...
Lenci 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 5,150 units, but its actual level of activity was 5,100 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: Fixed element per month Variable element per unit Revenue - $ 40.10 Direct labor $ 0...