Pratte Boat Wash's cost formula for its cleaning equipment and supplies is $2,600 per month plus $51 per boat. For the month of April, the company planned for activity of 56 boats, but the actual level of activity was 15 boats. The actual cleaning equipment and supplies for the month was $3,450. The spending variance for cleaning equipment and supplies in April would be closest to: Multiple Choice $85 F $2,006 F $85 U $2,006 U

Question

11-03-2020
Business

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Pratte Boat Wash's cost formula for its cleaning equipment and supplies is $2,600 per month plus $51 per boat. For the month of April, the company planned for activity of 56 boats, but the actual level of activity was 15 boats. The actual cleaning equipment and supplies for the month was $3,450. The spending variance for cleaning equipment and supplies in April would be closest to: Multiple Choice $85 F $2,006 F $85 U $2,006 U

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Answer:

The Correct answer is $85 U.

Explanation:

Spending change is the contrast among the real and expected (planned) measure of a cost

Genuine Spending on cleaning equipment and supplies in April = $3,450

Planned Spending in cleaning equipment and supplies in April = $2600 + $51 × 15 boat = $ 3365

Difference among Budgeted and Actual is $ 85 for example abundance spending than planned subsequently this difference is Unfavorable for organization.