The following is monthly budgeted cost and activity information for the four act
ID: 2465809 • Letter: T
Question
The following is monthly budgeted cost and activity information for the four activity centers in the billing department of Oregon Power Company:
Variable
Fixed
Cost Driver
$75,520
$170,000
3,200 labor hours
$9,315
$23,000
2,700 letters
$122,500
$87,000
2,450,000 lines
$10,360
$80,000
18,500 accounts
In September, actual costs and activity were as follows:
Total Costs
Driver Amount
$248,352
3,320 labor hours
$32,430
2,840 letters
$207,760
2,430,000 lines
$89,929
18,490 accounts
Required
Compute the flexible-budget variances for the following two activity cost items (round all answers to the nearest dollar and enter favorable variances as positive numbers and unfavorable variances as negative numbers):
1. What is Bill verification (? )
2. Correspondence (?)
Please show your work and give me exact anwser for number 1 and 2.
Activity CenterVariable
Fixed
Cost Driver
Account inquiry$75,520
$170,000
3,200 labor hours
Correspondence$9,315
$23,000
2,700 letters
Account billing$122,500
$87,000
2,450,000 lines
Bill verification$10,360
$80,000
18,500 accounts
Explanation / Answer
Solution-
Activity Center Cost Driver Fixed Variable Cost per driver Account inquiry 3,200 labor hours $170,000 $75,520 75520/3200 23.6 Correspondence 2,700 letters $23,000 $9,315 9315/2700 3.45 Account billing 2,450,000 lines $87,000 $122,500 122500/2450000 0.05 Bill verification 18,500 accounts $80,000 $10,360 10360/18500 0.56Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.