Accounting 225

Chapter 9 Class Exercises

10/30/2014
1. Luc Corporation manufactures and sells a single product. The company uses units as the
measure of activity in its budgets and performance reports. During February, the company
budgeted for 5,000 units, but its actual level of activity was 4,950 units. The company has
provided the following data concerning the formulas used in its budgeting and its actual results
for February:

a) How much are the selling and administrative expenses in the planning budget for February?

b) How much are the direct materials in the flexible budget for February?

c) What is the activity variance for direct labor in February? Is it favorable or unfavorable?

d) What is the spending variance for direct materials in February? Is it favorable or

unfavorable?