Questions #1-3 Topaz is a salon located in Manhattan. The salon\'s measure of ac

Question

Questions #1-3 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 Woo costs Hair supplies Occupancy costs Administrative costs None $29,000 S3,500 $12,000 S7.700 $52,200 S64.00 $21.00 $7.50 S2.30 S0.50 S31.30 Total costs Actual results Revenue Woo costs Hair supplies Occupancy costs Administrative costs $254,100 $109,500 $34,200 $19,800 $9,900 1. What is the revenue variance for the month of August? A. $1,300 F B. $1,900 U C. $8,300 F D. $3,990U E. None of the Above 2. What is the profit activity variance for August? A. S3,200F B. $4,905 U C. S3,200 U D. $4,905 F E. None of the above 3. What is the total spendi A. S3,335 F B. $4,500 U Page 717

Explanation / Answer

1) Revenue Variance = Flexible budget revenue-actual revenue

= (3950*64)-254100

Revenue variance = 1300 F

so answer is a) 1300 F

2) Profit activity variance = (4100-3950)*32.70 = 4905 U

so answer is b) $4905 U

3) Total spending variance for all expense :

Spending variance = Flexible budget expense-actual expense

= (31.30*3950)-173400

Spending variance = 49765 U

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