The following is monthly budgeted cost and activity information for two activities in the purchasing department of X Company:ActivityVariable CostsFixed CostsCost DriverSupplier relations$9,500$16,900380 suppliersInvoicing$11,700$26,300780 invoicesIn November, actual costs and activity were as follows:ActivityTotal CostsDriver AmountSupplier relations$28,555430 suppliersInvoicing$38,115806 invoicesWhat was the flexible budget variance for the invoicing activity for November (assume that favorable variances are positive numbers and unfavorable variances are negative numbers)?A: $-26,415B: $-26,025C: $-11,815D: $-115E: $0 OF: $275

Solution: Budgeted variable cost per invoice = $11,700 / 780 = $15 per invoice Flexible budget cost of invoicing activity = (806*$15) + $26,300 = $38,390 Actual cost of invoicing = $38,115 Flexible budget variance for invoicing activity for November = Budgeted costs - Actual costs = $38,390 - $38,115 = $275 Hence option f is correct.

Business

Accounting

The following is monthly budgeted cost and activity information for two activities in the purchasing department of X Company: Activity Variable Costs Fixed Costs Cost Driver Supplier relations $9,500 $16,900 380 suppliers Invoicing $11,700 $26,300 780 invoices In November, actual costs and activity were as follows: Activity Supplier relations Total Costs Driver Amount $28,555 430 suppliers Invoicing $38,115 806 invoices What was the flexible budget variance for the invoicing activity for November (assume that favorable variances are positive numbers and unfavorable variances are negative numbers)? A: $-26,415 B: $-26,025 ỐC: $-11,815 D: $-115 OE: $0 OF: $275

The following is monthly budgeted cost and activity information for two activities in the purchasing department of X Company: Activity Variable Costs Fixed Costs Cost Driver Supplier relations $9,500 $16,900 380 suppliers Invoicing $11,700 $26,300 780 invoices In November, actual costs and activity were as follows: Activity Supplier relations Total Costs Driver Amount $28,555 430 suppliers Invoicing $38,115 806 invoices What was the flexible budget variance for the invoicing activity for November (assume that favorable variances are positive numbers and unfavorable variances are negative numbers)? A: $-26,415 B: $-26,025 ỐC: $-11,815 D: $-115 OE: $0 OF: $275

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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