Problem - Deluca Manufacturing prepared the following cost control report for the prior month:
|
Planning Budget
|
Actual Results
|
Variances
|
|
Direct labor hours
|
30,000
|
33,000
|
|
|
Direct materials
|
$45.000
|
$55,000
|
$10,000 U
|
|
Direct labor wages
|
$480,000
|
$520.000
|
$40,000 U
|
|
Maintenance
|
$125,000
|
$136,000
|
$11,000 U
|
|
Utilities
|
$82,000
|
$86,000
|
$4,000 U
|
|
Rent
|
$65,000
|
$65,000
|
$0
|
|
Depreciation
|
$27.000
|
$27 000
|
$0
|
|
Total:
|
$824,000
|
$889.000
|
$65,000 U
|
Direct materials and direct labor wages are variable costs; rent and depreciation are fixed costs; and maintenance and utilities are mixed costs. The fixed component of the budgeted maintenance cost is $35,000: the fixed component of the budgeted utilities cost is $13,000.
What is the spending variance for Utilities?
a. $6.900 F
b. $6,900 U
c. $2.900 F
d. $2,900 U