Assume that a company provided the following cost formulas for three of its expenses (where q refers to the number of hours worked): Rent (fixed)$ 3,000Supplies (variable)$ 4.00qUtilities (mixed)$150 + $0.75qThe company’s planned level of activity was 2,000 hours and its actual level of activity was 1,870 hours. The actual amount of supplies expense for the period was $7,800. What is the activity variance for supplies expense?rev: 06_25_2020_

Solution: Activity variance is computed as = Planning budget amount - Flexible budget amount Planned…

Answered: Assume that a company provided the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Assume that a company provided the following cost formulas for three of its expenses (where q refers to the number of hours worked):

Rent (fixed)	$ 3,000
Supplies (variable)	$ 4.00q
Utilities (mixed)	$150 + $0.75q

The company’s planned level of activity was 2,000 hours and its actual level of activity was 1,870 hours. The actual amount of supplies expense for the period was $7,800. What is the activity variance for supplies expense?

rev: 06_25_2020_

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