Medlar Corporation's Static Planning Budget for June Appears Below

question 37

Multiple Choice

Medlar Corporation's static planning budget for June appears below. The company bases its budgets on machine-hours.
In June, the actual number of machine-hours was 9,300, the actual supplies cost was $19,760, the actual power cost was $35,720, the actual salaries cost was $27,130, and the actual equipment depreciation was $39,430.
-The spending variance for supplies cost in the flexible budget performance report for the month should be:

• A) $180 U
• B) $700 U
• C) $700 F
• D) $180 F

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Definitions:

Condition Subsequent

A future event or circumstance that, if it occurs, may terminate a party's obligation under a contract.

Constructive Condition

An implied condition in contracts that must be met before the obligation of the other party becomes due, even if it is not explicitly stated in the contract itself.

Impracticability

A doctrine that excuses a party from performing a contract when unforeseen events make performance excessively difficult or expensive.

Good Faith

Good Faith is the concept of acting with honesty and sincerity without any intention to defraud or seek unfair advantage.