Question

Photo Framing's cost formula for its supplies cost is $1,200 per month plus $20 per frame. For the month of November, the company planned for activity of 618 frames, but the actual level of activity was 610 frames. The actual supplies cost for the month was $13,850. The spending variance for supplies cost in November would be closest to:

Answer 1

Direct material spending variance= $451.4 unfavorable

Step-by-step explanation:

Giving the following information:

Photo Framing's cost formula for its supplies cost is $1,200 per month plus $20 per frame.

Actual level of activity was 610 frames. The actual supplies cost for the month was $13,850.

To calculate the spending variance, we need to use the following formula:

Direct material price variance= (standard price - actual price)*actual quantity

Actual price= (13,850 - 1,200)/610= $20.74

Direct material price variance= (20 - 20.74)*610

Direct material price variance= $451.4 unfavorable