Question

The following is total monthly budgeted cost and activity information for the four activity centers in...

The following is total monthly budgeted cost and activity information for the four activity centers in the billing department of Oregon Power Company:

Activity Center Variable Fixed Cost Driver
Statement inquiry $81,873 $165,000 3,300 labor hours
Correspondence $9,660 $23,000 2,800 letters
Account billing $171,500 $89,000 2,450,000 lines
Payment verification $8,930 $77,000 19,000 accounts


In September, actual total costs and activity were as follows:


Activity Center Total Costs Driver Amount
Statement inquiry $244,214 3,160 labor hours
Correspondence $31,310 2,650 letters
Account billing $270,774 2,600,000 lines
Payment verification $85,655 18,890 accounts


Required
Compute the flexible-budget variances for the following two activity cost items (round unit costs to two decimal places and enter favorable variances as positive numbers and unfavorable variances as negative numbers):

  Statement inquiry   

  Account billing （ ）
Business   Accounting   
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Answer #1

Variance has been calculated by keeping positive as favourable variances and vice versa.

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