Topaz is a salon located in Manhattan. The salon’s measure of activity is client

Question

Topaz is a salon located in Manhattan. The salon’s measure of activity is client-visits. The budgeted client visits for August were 4,100 and the actual visits for the month were 3,950. The following information is provided by the clinic and it pertains to the budgeted and actual data of August: Fixed Monthly Element Variable Monthly Element Budgeted data: Revenue None $64.00 Woo costs $29,000 $21.00 Hair supplies $3,500 $7.50 Occupancy costs $12,000 $2.30 Administrative costs $7,700 $0.50 Total costs $52,200 $31.30 Actual results: Revenue $254,100 Woo costs $109,500 Hair supplies $34,200 Occupancy costs $19,800 Administrative costs $9,900

What is the profit activity variance for August

What is the total spending variance for all expenses

Explanation / Answer

1)

Profit Variance :Budgeted profit -Actual profit

              = 81870 -80700

              =1170 U

2)

Spending variance =Actual - standard cost

                  173400 -175835

                   - 2435 Favorable

Budgeted activity Actual activity Revenue 4100*64= 262400 254100 less:cost Woo costs (115100)   [29000+(21*4100)] (109500) Hair supplies (34250)     [3500+(7.5*4100)] (34200) Occupancy costs (21430)     [12000+(2.3*4100)] (19800) Administrative costs (9750)       [7700+(.50*4100)] (9900) Total cost (180530) (173400) Profit 81870 80700

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