Prestridge Corporation Is a Service Company That Measures Its Output

question 221

Multiple Choice

Prestridge Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for August. When the company prepared its planning budget at the beginning of August, it assumed that 31 customers would have been served. However, 29 customers were actually served during August.The spending variance for total expenses for August would have been closest to:

• A) $2,500 U
• B) $2,500 F
• C) $500 F
• D) $500 U