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Petrus Framing's cost formula for its supplies cost is $1,860 per month plus $11 per frame. For the month of March, the company planned for activity of 626 frames, but the actual level of activity was 635 frames. The actual supplies cost for the month was $9,200. The activity variance for supplies cost in March would be closest to:
Petrus Framing's cost formula for its supplies cost is $1,860 per month plus $11 per frame. For the month of March, the company planned for activity of 626 frames, but the actual level of activity was 635 frames. The actual supplies cost for the month was $9,200. The activity variance for supplies cost in March would be closest to:
The activity variance for Petrus Framing's supplies cost in March is the difference between the budgeted supplies cost based on the actual activity level and the actual supplies cost incurred, resulting in an unfavorable variance of $355.To calculate the activity variance for supplies cost for Petrus Framing in March, we first need to find out the budgeted supplies cost based on the actual activity level.We do this by using the cost formula provided: a fixed cost of $1,860 per month plus $11 per frame.Since the actual activity was 635 frames, the budgeted cost becomes $1,860 plus (635 frames x $11), which equals $8,845.We then compare this to the actual supplies cost of $9,200 to determine the activity variance.The activity variance is the difference between the budgeted cost and the actual cost: $8,845 (budgeted) - $9,200 (actual) = $355.Because the actual cost is higher than the budgeted cost, we have an unfavorable variance of $355....