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22 May, 12:01

Fancy Nails has an estimated cost for supplies of $0.75 per manicure. June's budget was based on 2,400 manicures and a total cost for supplies of $1,800. June's actual activity was 2,500 manicures. Total cost of supplies in June was $2,000. Calculate the spending variance for June. a. $125 U b. $200 U c. $200 F d. $125 F

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  1. 22 May, 15:33
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    a. $125 U

    Explanation:

    The computation of the spending variance is shown below:

    = Flexible cost - actual cost

    where,

    Flexible cost = 2,500 manicures * $0.75 = $1,875

    And, the actual cost is $2,000

    Now put these values to the above formula

    So, the value would equal to

    = $1,875 - $2,000

    = $125 U

    It shows a difference between the actual cost and the flexible cost. Since the flexible cost is less than the actual cost so, it is unfavorable otherwise it would be favorable
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