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 unitRevenue - $ 34.90Direct labor $0 $ 5.50Direct materials 0 13.40Manufacturing overhead 31,000 2.40Selling and administrative expenses 26,200 0.20Total expenses $ 57,200 $ 21.50 Actual results for May:Revenue $ 257,800Direct labor $ 39,870Direct materials $ 99,890Manufacturing overhead $ 47,000Selling and administrative expenses $ 30,54The activity variance for direct labor in May would be closest to:_____

Respuesta :

Answer:

Explanation:

Activity Variance for Direct Labor = Direct Labor cost for Budgeted 7400 units – Direct Labor cost for Actual 7350 units at Budgeted Cost.

Budgeted Direct Labor Cost for Budgeted 7400 units = 7400 units x $ 5.50 = $ 40,700

Budgeted Direct Labor Cost for Actual 7350 units = 7350 units x $ 5.50 = $ 40,425

Activity Variance for direct labor cost = $ 40,700 – $ 40,425

= $ 275