The following information is given for one of a company's variable expenses: • The activity variance is $850 favorable. • The actual amount of the expense is $8,300. • The planned level of activity in the master budget is 1,000 hours. • The actual level of activity is 900 hours. The budget rate per hour for this expense must be:

The following information is given for one of a company's variable expenses: • The activity variance is $850 favorable. • The actual amount of the expense is $8,300. • The planned level of activity in the master budget is 1,000 hours. • The actual level of activity is 900 hours. The budget rate per hour for this expense must be:

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 the cost formula for one of a company's variable expenses is $5.00 per unit. The company's planned level of activity was 2,000 units and its actual level of activity was 2,200 units. The actual amount of this expense was $10,800. The spending variance for this expense is Multiple Choice $1,000 F $800 $200 F $1,000 U
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Matthew works in the accounting department of a local footwear manufacturer that specializes in clogs and boots. Clogs and boots typically sell for $97 and $192 per pair, respectively. Based on past experience, fashion trends, and seasonal shifts, the company expected to sell 760 pairs of clogs and 240 pairs of boots. The variable cost per pair was $52 for clogs and $78 for boots. At the end of the year, Matthew evaluated the company's sales and contribution margin amounts against the budget. Actual results for the year were as follows. . . . (a) Actual sales volume: clogs, 869; boots, 231. Actual selling price: clogs, $108 per pair; boots, $181 per pair. Actual per-unit variable costs for each product were the same as budgeted. Your answer is correct.
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