In this problem, you must create the flexible budget and flexible budget varianc

Question

In this problem, you must create the flexible budget and flexible budget variances for two cost items. I suggest the following steps for each item: 1. determine the cost function for the two items 2. plug in the appropriate activity amount and compute the budget 3. subtract the actual cost and compute the variance. Be sure to follow the instructions about the sign that you should enter with your numerical answer. There is no partial credit - you must get both variances correct in order to get the full 10 points. The following is monthly budgeted cost and activity information for the four activity centers in the billing department of Oregon Power Company:

Explanation / Answer

Variable Cost Driver Acvity rate Bill verfication 7380 18000 0.41 Account Enquiry 79084 3400 23.26 Fixed Bill verfication 77000 Account Enquiry 168000 Flexible Budget Variable Fixed Total Bill verfication 17930*.41 7351.3 77000 84351.3 Actual 83685 Variance   666.3 Favourable Flexible Budget Variable Fixed Total Account Enquiry 3370*23.26 78386.2 168000 246386.2 Actual 245969 417.2 Favourable

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.