Neeb Corporation Manufactures and Sells a Single Product

question 39

Multiple Choice

Neeb Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During January, the company budgeted for 7,070 units, but its actual level of activity was 7,180 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for January:Data used in budgeting: Actual results for January:
The activity variance for selling and administrative expenses in January would be closest to:

• A) $611 U
• B) $55 U
• C) $611 F
• D) $55 F

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Definitions:

IFRS

Stands for International Financial Reporting Standards, which are designed to make company accounts understandable and comparable across international boundaries.

Highly Liquid Investments

Investments that can easily and quickly be converted into cash with little loss of value.

Petty Cash Fund

A modest sum of money held in reserve for small or unplanned expenses.

Cash Replenishment

The process of refilling a petty cash fund to its designated level after it has been depleted through use.