The following is total monthly budgeted cost and activity information for the fo
ID: 2508944 • Letter: T
Question
The following is total monthly budgeted cost and activity information for the four activity centers in the billing department of Oregon Power Company:
Variable
Fixed
Cost Driver
$78,982
$151,000
3,400 labor hours
$9,520
$30,000
2,800 letters
$130,000
$72,000
2,600,000 lines
$10,400
$78,000
20,000 accounts
In September, actual costs and activity were as follows:
Total Costs
Driver Amount
$227,698
3,300 labor hours
$39,836
2,700 letters
$198,600
2,530,000 lines
$87,692
19,800 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):
Variable
Fixed
Cost Driver
Account inquiry$78,982
$151,000
3,400 labor hours
Correspondence$9,520
$30,000
2,800 letters
Account billing$130,000
$72,000
2,600,000 lines
Bill verification$10,400
$78,000
20,000 accounts
Explanation / Answer
Compute flexible budget variance :
Actual Flexible budget Flexible budget variance Account inquiry 227698 227659 39 U Correspondence 39836 39180 656 U Account billing 198600 198500 100 U Bill verification 87692 88296 604 F Total 553826 553635 191 URelated Questions
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