Lotson Corporation Bases Its Budgets on Machine-Hours

question 10

Multiple Choice

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

• A)$1,550 F
• B)$4,160 F
• C)$1,550 U
• D)$4,160 U

---

Definitions:

Future Indicator

A measurable economic factor that changes before the economy starts to follow a particular pattern or trend, signaling future activities.

Supply-side Economics

An economic theory that suggests lower taxes and decreased regulation will stimulate the economy by increasing production.

Incentive

A factor, monetary or otherwise, that motivates individuals or entities to behave in a certain way.

Work

Physical or mental effort done in order to achieve a purpose or result, often related to employment or tasks.