The following is total monthly budgeted cost and activity information for the fo
ID: 2522394 • 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
$79,050
$159,000
3,400 labor hours
$10,179
$27,000
2,900 letters
$130,000
$74,000
2,600,000 lines
$11,440
$76,000
22,000 accounts
In September, actual costs and activity were as follows:
Total Costs
Driver Amount
$233,959
3,250 labor hours
$36,388
2,890 letters
$211,885
2,760,000 lines
$87,165
21,900 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$79,050
$159,000
3,400 labor hours
Correspondence$10,179
$27,000
2,900 letters
Account billing$130,000
$74,000
2,600,000 lines
Bill verification$11,440
$76,000
22,000 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 37144 36388 756 F Account billing 212000 211885 115 FRelated Questions
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