The following is total monthly budgeted cost and activity information for the fo
ID: 2519937 • 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
$84,898
$165,000
3,400 labor hours
$9,884
$20,000
2,800 letters
$130,000
$88,000
2,600,000 lines
$9,360
$78,000
18,000 accounts
In September, actual costs and activity were as follows:
Total Costs
Driver Amount
$252,360
3,500 labor hours
$30,860
2,840 letters
$225,091
2,730,000 lines
$87,066
18,150 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$84,898
$165,000
3,400 labor hours
Correspondence$9,884
$20,000
2,800 letters
Account billing$130,000
$88,000
2,600,000 lines
Bill verification$9,360
$78,000
18,000 accounts
Explanation / Answer
Particulars
Actual (A)
Flexible (B)
Favourable / Unfavourable (B)-(A)
$
$
Computation Notes
Account billing
$225,091
$224,500
[$88,000+($130,000/2,600,000)*2,730,000]
$591 Unfavourable
Correspondence
$30,860
$30,025.20 (or $30,025)
[$20,000+($9,884/2,800)*2,840]
$834.80 Unfavourable (or $835)
Particulars
Actual (A)
Flexible (B)
Favourable / Unfavourable (B)-(A)
$
$
Computation Notes
Account billing
$225,091
$224,500
[$88,000+($130,000/2,600,000)*2,730,000]
$591 Unfavourable
Correspondence
$30,860
$30,025.20 (or $30,025)
[$20,000+($9,884/2,800)*2,840]
$834.80 Unfavourable (or $835)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.