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ume the following information for one of a company’s variable expenses:  The activity variance is $790 favorable. The actual amount of the expense is $8,300. The planned level of activity is 1,000 hours. The actual level of activity is 900 hours. The cost formula for this expense must be:

ume the following information for one of a company’s variable expenses:  The activity variance is $790 favorable. The actual amount of the expense is $8,300. The planned level of activity is 1,000 hours. The actual level of activity is 900 hours. The cost formula for this expense must be:

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
Section: Chapter Questions
Problem 4BE
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Assume the following information for one of a company’s variable expenses: 

  • The activity variance is $790 favorable.
  • The actual amount of the expense is $8,300.
  • The planned level of activity is 1,000 hours.
  • The actual level of activity is 900 hours.

The cost formula for this expense must be:

 

Multiple Choice
  •  
    $8.20 per hour.
  •  
    $8.90 per hour.
  •  
    $7.90 per hour.
  •  
    $7.20 per hour.
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