The following is total monthly budgeted cost and activity information for the fo
ID: 2521280 • 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
$78,710
$164,000
3,400 labor hours
$10,150
$27,000
2,900 letters
$156,000
$70,000
2,600,000 lines
$9,460
$78,000
22,000 accounts
In September, actual costs and activity were as follows:
Total Costs
Driver Amount
$247,913
3,590 labor hours
$36,540
2,830 letters
$230,848
2,670,000 lines
$87,128
22,110 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 inquiry :
Account billing :
Variable
Fixed
Cost Driver
Account inquiry$78,710
$164,000
3,400 labor hours
Correspondence$10,150
$27,000
2,900 letters
Account billing$156,000
$70,000
2,600,000 lines
Bill verification$9,460
$78,000
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):
Actual Flexible budget Account inquiry 247913 247109 -804 U Account billing 230848 230200 -648 URelated Questions
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