Beatrice Math offers two tutoring models: individual and group. The individual model provides one-on-one tutoring while the group model consists of groups of no more than four students. The individual model has a budgeted average price of $275. The group model has a budgeted. average price of $75. The manager of the tutoring center believes that 65 percent of the customers will choose the group model. The individual model averages $185 and the group model averages $45 in budgeted variable cost. The manager estimates that about 160 people will purchase tutoring services in any month. For October, the tutoring center served a total of 170 customers, including 110 that chose the group option. Required: a. Compute the sales activity variance for the tutoring center for October. b. Compute the mix and quantity variances for October.
Beatrice Math offers two tutoring models: individual and group. The individual model provides one-on-one tutoring while the group model consists of groups of no more than four students. The individual model has a budgeted average price of $275. The group model has a budgeted. average price of $75. The manager of the tutoring center believes that 65 percent of the customers will choose the group model. The individual model averages $185 and the group model averages $45 in budgeted variable cost. The manager estimates that about 160 people will purchase tutoring services in any month. For October, the tutoring center served a total of 170 customers, including 110 that chose the group option. Required: a. Compute the sales activity variance for the tutoring center for October. b. Compute the mix and quantity variances for October.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
Section: Chapter Questions
Problem 38P: Friendly Bank is attempting to determine the cost behavior of its small business lending operations....
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Transcribed Image Text:Beatrice Math offers two tutoring
models: individual and group. The
individual model provides one-on-one
tutoring while the group model
consists of groups of no more than
four students. The individual model
has a budgeted average price of $275.
The group model has a budgeted
average price of $75. The manager of
the tutoring center believes that 65
percent of the customers will choose
the group model. The individual model
averages $185 and the group model
averages $45 in budgeted variable
cost. The manager estimates that
about 160 people will purchase
tutoring services in any month.
For October, the tutoring center served
a total of 170 customers, including 110
that chose the group option.
Required:
a. Compute the sales activity variance
for the tutoring center for October.
b. Compute the mix and quantity
variances for October.
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