Question

Jerry’s oil change Service uses a flexible budget and has the following cost formulas as a...

Jerry’s oil change Service uses a flexible budget and has the following cost formulas as a function of cars serviced (cars serviced = x) for each month

Revenue = $30x

Labor = $10x

Administration = $3,000

Other = $5,000 + 2x

During October, Jerry expected to service 2,000 cars (the planning budget volume) but actually serviced 2,200 cars.

Actual results were as follows:

            Revenue                       $69,000

            Labor                            $25,000

            Administration              $3,300

            Other                           $9,900

  1. What is the activity variance for labor for October?
  1. What is the revenue variance for October?
  1. What is the spending variance for other in October?
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