The following is total monthly budgeted cost and activity information for the fo
ID: 2522099 • 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
$81,939
$155,000
3,300 labor hours
$9,632
$30,000
2,800 letters
$156,000
$86,000
2,600,000 lines
$7,980
$76,000
19,000 accounts
In September, actual costs and activity were as follows:
Total Costs
Driver Amount
$240,493
3,420 labor hours
$39,114
2,800 letters
$231,236
2,410,000 lines
$83,531
19,000 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):
Correspondence __________
Account billing ___________
Variable
Fixed
Cost Driver
Account inquiry$81,939
$155,000
3,300 labor hours
Correspondence$9,632
$30,000
2,800 letters
Account billing$156,000
$86,000
2,600,000 lines
Bill verification$7,980
$76,000
19,000 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 Correspondence 39632 39114 518 F Account billing 230600 231236 -636 URelated Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.