Privitera Printing uses two measures of activity, press runs and book set-ups, i

Question

Privitera Printing uses two measures of activity, press runs and book set-ups, in the cost formulas in its budgets and performance reports. The cost formula for wages and salaries is $7,220 per month plus $650 per press run plus $1,110 per book set-up. The company expected its activity in January to be 188 press runs and 117 book set-ups, but the actual activity was 191 press runs and 114 book set-ups. The actual cost for wages and salaries in January was $269,270.

The wages and salaries in the planning budget for January would be closest to:

.

Thomasson Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $36,160 per month plus $2,038 per flight plus $1 per passenger. The company expected its activity in April to be 73 flights and 223 passengers, but the actual activity was 72 flights and 228 passengers. The actual cost for plane operating costs in April was $179,020. The activity variance for plane operating costs in April would be closest to:

Explanation / Answer

1 Wages and salaries in the planning budget=7220+(650*188)+(1110*117)= $259290 2 Plane operating costs in planning budget=36160+(2038*73)+(1*223)= $185157 Plane operating costs in flexible budget=36160+(2038*72)+(1*228)= $183124 Activity variance for plane operating costs = 185157-183124=$2033 F

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