A moving company budgeted for 500 moves, but its actual level of activity was 600 moves. The company provided the following budget and actual results. Assume that fuel costs are variable costs and equipment leasing is a fixed cost. • Budgeted cost for fuel: $2,500 • Actual cost for fuel: $3,000 What is the activity variance for fuel costs? A. $250 U B. $500 U C. $600 U D. $400 U

A moving company budgeted for 500 moves, but its actual level of activity was 600 moves. The company provided the following budget and actual results. Assume that fuel costs are variable costs and equipment leasing is a fixed cost. • Budgeted cost for fuel: $2,500 • Actual cost for fuel: $3,000 What is the activity variance for fuel costs? A. $250 U B. $500 U C. $600 U D. $400 U

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 29BEB: Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and...

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Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and Determine Budgeted Cost Refer to the information for Speedy Petes on the previous page. Coefficients shown by a regression program for Speedy Petes data are: Required: Use the results of regression to make the following calculations: 1. Calculate the fixed cost of deliveries and the variable rate per delivery. 2. Construct the cost formula for total delivery cost. 3. Calculate the budgeted cost for next month, assuming that 3,000 deliveries are budgeted. (Note: Round answers to the nearest dollar.) Use the following information for Brief Exercises 3-26 through 3-29: Speedy Petes is a small start-up company that delivers high-end coffee drinks to large metropolitan office buildings via a cutting-edge motorized coffee cart to compete with other premium coffee shops. Data for the past 8 months were collected as follows:
Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and Determine Budgeted Cost Refer to the information for Pizza Vesuvio on the previous page. Coefficients shown by a regression program for Pizza Vesuvios data are: Required: Use the results of regression to make the following calculations: 1. Calculate the fixed cost of labor and the variable rate per employee hour. 2. Construct the cost formula for total labor cost. 3. Calculate the budgeted cost for next month, assuming that 675 employee hours are budgeted. (Note: Round answers to the nearest dollar.) Use the following information for Brief Exercises 3-17 through 3-20: Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected:
Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.
Assume that the moving activity has an expected cost of 80,000. Expected direct labor hours are 20,000, and expected number of moves is 40,000. The best activity for moving is a. 4 per move. b. 1.33 per hour-move. c. 4 per hour. d. 2 per move. e. e None of these.
Computing unit costs at different levels of production French Fragrances, Ltd. budgeted for 12,000 bottles of perfume Belle during May. The unit cost of Belle was $20, consisting of direct materials, $7; direct labor, $8; and factory overhead, $5 (fixed, $2; variable, $3). What would be the unit cost if 10,000 bottles were manufactured? (Hint: You must first determine the total fixed costs.) What would be the unit cost if 20,000 bottles were manufactured? Explain why a difference occurs in the unit costs.
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Question 4 A). Briefly discuss the difference between traditional costing and activity-based costing ( B). TruValue Company uses flexible budget to control its selling expenses. Monthly sales are expected to range from $170,000 to $200,000. Variable costs and their percentage relationship to sales are sales commission 6%, advertising 4%, traveling 3% and delivery 2%. Fixed selling expenses will consist of sales salaries $35,000, depreciation on delivery equipment $7,000, and insurance on delivery equipment $1,000. The actual selling expenses incurred in March, 2023 are: Variable Expenses Sales commission Advertising Travel Delivery $11,000 6,900 5,100 3,450 Fixed Expenses $35,000 Sales salaries Depreciation Insurance 7,000 1,000 a) Prepare a monthly flexible budget for each $10,000 increment of sales within the relevant range for the year ending December 31, 2023. b) Prepare a flexible budget performance report for March, assuming that March sales were $170,000. c) Comment on the…
LO.8 (Appendix; Least squares regression) UpTop Mining has compiled the follcowing data to analyze utilitry costs: Month Machine Hours Utility cost January 200 $300 February 325 440 March 400 480 April 410 490 May 525 620 June 680 790 July 820 840 August 900 900 Use the least squares method to develop a formula for budgeting utility cost.
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Using High low method, what is variable cost per unit?