Question

Sigler Lube's cost formula for its supplies cost is $1,150 per month plus $11 per oil...

Sigler Lube's cost formula for its supplies cost is $1,150 per month plus $11 per oil change. For the month of May, the company planned for activity of 789 oil changes, but the actual level of activity was 792 oil changes. The actual supplies cost for the month was $9,480. The spending variance for supplies cost in May would be:

a.$382 F

b.$349 U

c.$349 F

d.$382 U

The Baskell Surgery Center's cost formula for its payroll is $1,220 per month plus $246 per procedure. For the the month of December, the company planned for activity of 106 procedures, but the actual level of activity was 102 procedures. The actual payroll cost for the month was $27,250. The activity variance for the payroll cost in December would be closest to:

a.$984F

b.$46U

c.$984U

d. $46F

Michelle's Arts and craft's cost formula for its supplies cost is $3,280 per month plus $18 per craft kit For the month of April, the company planned for activity of 1,144 craft kits, but the actual level of activity was 1,146 frames. The actual supplies cost for the month was $24,160. The supplies cost in the planning budget for April would be closest to:

a.$24,124.00

b.$23,908.00

c.$23,872.00

d. $24,160.00

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Homework Answers

Answer #1

Solution 1:

Spending variance = Budgeted cost for actual oil changes - Actual cost

= ($1,150 + 792*$11) - $9,480

= $382 F

Hence option a is correct.

Solution 2:

The activity variance for the payroll cost in December would be closest to = Budgeted cost for planned activity - Budgeted cost for actual activity

= ($1,220 + 106*$246) - ($1,220 + 102*$246) = $984 F

Hence option a is correct.

Solution 3:

The supplies cost in the planning budget for April would be closest to = $3,280 + 1144*$18 = $23,872

Hence option c is correct.

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