Diemert Corporation Bases Its Budgets on Machine-Hours

question 2

Multiple Choice

Diemert Corporation bases its budgets on machine-hours. The company's static planning budget for June appears below: Actual results for the month were: The spending variance for supplies costs in the performance report for the month should be:

• A)$5,180 F
• B)$2,420 U
• C)$5,180 U
• D)$2,420 F

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Definitions:

Net Present Value

A calculation that determines the current value of a series of future cash flows, discounted back to their present value at a specific discount rate.

Funding Requests

Applications or appeals for financial support, typically made by businesses or organizations to potential investors or grant bodies.

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to its sales volume, indicating how earnings are affected by revenue changes.

Contribution Margin

The amount by which the sale of a product exceeds its variable costs, indicating how much contributes to covering fixed costs and generating profit.