The spending variance for supplies cost for the month should be:

A) $180 U
B) $700 U
C) $700 F
D) $180 F

Question

The spending variance for supplies cost for the month should be:A) $180 UB) $700 UC) $700 FD) $180 F

ANNABELLE REYNA · Accepted Answer

Final Answer : C, Explanation :  The actual cost of supplies ($3,200) is higher than the budgeted cost ($2,500), meaning there was an unfavorable variance. The amount of the unfavorable variance is the difference between the actual and budgeted cost: $3,200 - $2,500 = $700 F (F for unfavorable). Therefore, the correct answer is C, $700 F. Options A and D are incorrect because they refer to a favorable variance, which is not the case in this scenario. Option B is also incorrect because it does not reflect the correct variance direction.   Because the actual expense is less than the flexible budget, the variance is favorable (F).

The spending variance for supplies cost for the month should be:

A) $180 U
B) $700 U
C) $700 F
D) $180 F

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Learning Objectives

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