Baugus Corporation Manufactures and Sells a Single Product

question 17

Multiple Choice

Baugus Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During August, the company budgeted for 6,900 units, but its actual level of activity was 6,950 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for August:
-The activity variance for direct labor in August would be closest to:

• A) $1,220 F
• B) $210 U
• C) $210 F
• D) $1,220 U

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Definitions:

Laundry Costs

Expenses associated with the cleaning of textiles, garments, and other fabrics, often considered in both personal finance and in the operating costs of businesses that require frequent laundering of uniforms or linens.

Manufacturing Overhead

The indirect costs associated with manufacturing, including costs related to operating the factory that are not directly tied to the production of goods.

Spending Variance

The difference between the actual amount spent and the budgeted or planned amount in a financial plan or budget.

Refurbishing Materials

Materials used in the process of repairing and enhancing a product's appearance or functionality to a like-new condition.