The following is total monthly budgeted cost and activity information for the fo
ID: 2513660 • 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
$73,696
$164,000
3,200 labor hours
$9,477
$22,000
2,700 letters
$150,000
$87,000
2,500,000 lines
$9,805
$78,000
18,500 accounts
In September, actual costs and activity were as follows:
Total Costs
Driver Amount
$236,983
3,160 labor hours
$32,371
2,760 letters
$242,177
2,600,000 lines
$88,004
18,620 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
Correspondence
Variable
Fixed
Cost Driver
Account inquiry$73,696
$164,000
3,200 labor hours
Correspondence$9,477
$22,000
2,700 letters
Account billing$150,000
$87,000
2,500,000 lines
Bill verification$9,805
$78,000
18,500 accounts
Explanation / Answer
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):
Flexible budget Actual Flexible budget variance Account billing 243000 242177 823 F Correspondence 31688 32371 -683 URelated Questions
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