contestada

Herrod Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $530 per month plus $102 per job plus $33 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in December to be 10 jobs and 133 meals, but the actual activity was 5 jobs and 116 meals. The actual cost for catering supplies in December was $5,350.


The spending variance for catering supplies in December would be closest to:

Respuesta :

Answer:

$482 unfavorable

Explanation:

The computation of the spending variance for catering supplies is shown below;

= Catering supplies for flexible budget - Actual catering supplies expense

where,

Catering supplies for flexible budget  is

= $530 + ($102 × 5 jobs) + ($33 × 116 meals)

= $530 + $510 + $3,828

= $4,868

And, the actual catering supplies is $5,350

So, the spending variance is

= $4,868 - $5,350

= $482 unfavorable

Since the actual cost is more than the flexible one so it would lead to unfavorable variance

Otras preguntas