The following is total monthly budgeted cost and activity information for the fo
ID: 2511636 • 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
$77,979
$165,000
3,300 labor hours
$10,179
$29,000
2,900 letters
$122,500
$83,000
2,450,000 lines
$10,915
$76,000
18,500 accounts
In September, actual costs and activity were as follows:
Total Costs
Driver Amount
$243,684
3,310 labor hours
$37,979
2,740 letters
$207,108
2,480,000 lines
$86,919
18,580 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):
Account billing
Account inquiry
Variable
Fixed
Cost Driver
Account inquiry$77,979
$165,000
3,300 labor hours
Correspondence$10,179
$29,000
2,900 letters
Account billing$122,500
$83,000
2,450,000 lines
Bill verification$10,915
$76,000
18,500 accounts
Explanation / Answer
Calculate flexible budget variance :
Flexible budget actual Flexible budget variance Account billing 207000 207108 -108 U Account inquiry 243215 243684 -469 URelated Questions
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