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

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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
Account inquiry	$80,916	$151,000	3,300 labor hours
Correspondence	$10,034	$24,000	2,900 letters
Account billing	$122,500	$70,000	2,450,000 lines
Bill verification	$12,760	$76,000	22,000 accounts

In September, actual costs and activity were as follows:

Activity Center	Total Costs	Driver Amount
Account inquiry	$231,540	3,270 labor hours
Correspondence	$33,946	2,830 letters
Account billing	$200,676	2,600,000 lines
Bill verification	$89,467	22,180 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 billing

Correspondence

business accounting

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Answer 1

Answer #1

	Flexible-budget
Account billing	200000	=70000+(122500/2450000*2600000)
Correspondence	33792	=24000+(10034/2900*2830)

	Flexible-budget variances
Account billing	-676	=200000-200676
Correspondence	-154	=33792-33946

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Answer 2

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