1. Lochner Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for June.

	Fixed Element per Month			Variable Element per Well Serviced		Actual Total for June
Revenue				$	5,600	$	148,000
Employee salaries and wages	$	40,600		$	1,200	$	73,700
Servicing materials				$	500	$	13,600
Other expenses	$	42,800				$	43,300

When the company prepared its planning budget at the beginning of June, it assumed that 24 wells would have been serviced. However, 26 wells were actually serviced during June.

The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for June would have been closest to:

Multiple Choice

• $2,400 U

• $13,600 U

• $2,400 F

• $13,600 F

2. Skoff Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for March.

	Fixed Element per Month			Variable Element per Container Refurbished		Actual Total for March
Revenue				$	4,000	$	130,000
Employee salaries and wages	$	42,700		$	1,000	$	75,600
Refurbishing materials				$	600	$	18,800
Other expenses	$	37,900				$	38,400

When the company prepared its planning budget at the beginning of March, it assumed that 35 containers would have been refurbished. However, 32 containers were actually refurbished during March.

The activity variance for Other expenses for March would have been closest to:

Multiple Choice

• $0

• $4,100 U

• $500 F

• $500 U