Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed Element per Month Variable Element per Container Refurbished Revenue $ 5,300 Employee salaries and wages $ 55,100 $ 900 Refurbishing materials $ 600 Other expenses $ 41,200 When the company prepared its planning budget at the beginning of February, it assumed that 37 containers would have been refurbished. However, 32 containers were actually refurbished during February.

The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for February would have been closest to:

Multiple Choice

$1,800 F

$1,800 U

$17,200 U

$17,200 F

Revenue and spending variance is a measure of difference between actual revenue applied based to production volume and the refurbished based on production volume. The variance can be favorable or unfavorable. The unfavorable variance indicates that the revenue actually applied based on production volume are less than budgeted revenue based on production volume.

The container refurbished = 37 - 32 container = 5 containers.

5 * (5,300 + 900 + 600) = 34,000