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XYZ Tile Installation Corporation measures its activity in terms of square feet of tile installed. Last month, the budgeted level of activity was 1,180 square feet and the actual level of activity was 1,270 square feet. The company's owner budgets for supply costs, a variable cost, at $3.50 per square foot. The actual supply cost last month was $4,980. What would have been the spending variance for supply costs

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Cricetus

Answer:

The appropriate solution is "$535 U". A further explanation is described below.

Explanation:

The given values are:

Actual level of activity,

= 1270

Budgeted variable cost,

= $3.50

Actual supply cost,

= $4980

Now,

The spending variance for supply costs will be:

= [tex](Actual \ level \ of \ activity\times Budgeted \ variable \ cost)\times Actual \ supply \ cost[/tex]

= [tex](1270\times 3.50)-4980[/tex]

= [tex]4445-4980[/tex]

= [tex]535[/tex] (unfavorable)

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