Question

s April as shown be- The nest tme questions are baset on the tollowing Rainbow Corporation is a service company actual results that measures its output based on the number of customers served and the mumber of service cost estiniales that it uses for budgeting purposes Veriable Variable elensent per element per element per crual tostal eustomer served servie s 9o s 52,200 S 36,500 S 2.600 s 7.500 s 150 5 30 s 25 s 15,000 s 10 Employee salaries and wages Fras el expenses Other epense Number of customers served in Apri Number ofservice hours in April 200 240 180 220 hours 13 W hat is the spending variance with respect to employee salaries and wages for April? c. D. E. None of the above S1,100 Fas orable S1.100 Unfavorable 59.500 Favorable 59.500 Unfavorable 4 What is the activiy variance in operating income for April? 3,500 Favorable 3.500 Unfavorable 58.600 Fav orable 58,600 Unfavorable B. C. E. None of the above

Answer 1

solution: Q13 spending variance(Actual cost Flexible budget) 36500-(200*30+240*25+15000) 9500 Unfavorable 014 Variable element Variable element fixed cost per customer served per service hour flexible budget Planning budget a+b 200+c 240 a+b*180+c 220 46,800 Revenue Expenses Employee salaries and wages Travel expense Other expense Total expense Net operating income 150.00 90.00 51,600 27,000 2,400 8,000 37,400 14,200 25.00 10.00 15000 30.00 25,900 2,200 8,000 36,100 10,700 8000 Activity variance (14200-10700) Flexible budget Planning budget 3,500 Favorable