Dure Corporation's Cost Formula for Its Selling and Administrative Expense

question 392

Multiple Choice

Dure Corporation's cost formula for its selling and administrative expense is $24,500 per month plus $1 per unit. For the month of July, the company planned for activity of 7,200 units, but the actual level of activity was 7,160 units. The actual selling and administrative expense for the month was $31,460.The activity variance for selling and administrative expense in July would be closest to:

• A) $240 F
• B) $40 F
• C) $40 U
• D) $240 U

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Definitions:

Project Scope

The detailed outline of a project's goals, deliverables, features, and tasks, as well as what is excluded.

Scope Creep

The gradual expansion of a project's scope, often resulting in delays, cost overruns, and deviation from original goals without proper authorization.

Step Change

A significant and rapid change or transformation, often improving a situation or system dramatically.

Crashing

The process of expediting project completion typically by adding more resources or by working extra hours, often resulting in increased costs.