Lenci Corporation Manufactures and Sells a Single Product

Multiple Choice

Lenci Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,100 units, but its actual level of activity was 5,050 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting:
Actual results for May:
The spending variance for direct materials in May would be closest to:

A) $195 U
B) $980 U
C) $980 F
D) $195 F