Asked by Elizabeth Hubbard on Apr 27, 2024
Verified
Lightsey Natural Dying Corporation measures its activity in terms of skeins of yarn dyed.Last month, the budgeted level of activity was 14,800 skeins and the actual level of activity was 15,100 skeins.The company's owner budgets for dye costs, a variable cost, at $0.51 per skein.The actual dye cost last month was $8,660.What would have been the spending variance for dye costs?
A) $959 U
B) $172 U
C) $1,112 U
D) $153 U
Dye Costs
The expenditures associated with dyes or coloring agents used in the manufacturing process of products.
Skeins
Lengths or coils of yarn or thread as they are sold or produced, often used in textiles and knitting.
Spending Variance
This is the difference between the actual amount spent on a budget item and its planned or budgeted amount.
- Quantify and analyze disparities in budget management, including expenses, revenues, and operational income variances.
- Determine the routine expenses and pricing anomalies during budgetary forecasting.
Verified Answer
GE
Georgio El-khassApr 28, 2024
Final Answer :
A
Explanation : 
Because the actual expense is greater than the flexible budget, the variance is unfavorable (U).
Because the actual expense is greater than the flexible budget, the variance is unfavorable (U).
Learning Objectives
- Quantify and analyze disparities in budget management, including expenses, revenues, and operational income variances.
- Determine the routine expenses and pricing anomalies during budgetary forecasting.
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