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A company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed Cost per Month Variable Cost per Unit
A company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed Cost per Month Variable Cost per Unit Serviced Revenue $4,600 Wages expense $40,700 $1,000 $600 Materials Other expenses $29,100 When the company prepared its planning budget at the beginning of November, it assumed that 28 units would be serviced, however the actual number of units serviced in November was 26. Using the information above answer the following questions. Show all work to receive any credit. a. The amount shown for Wages expense in the planning budget for November would have been b. The amount shown for Wages expense in the flexible budget for November would have been c. The amount of the activity variance for Wages expense for November would have been (indicate the amount and whether the variance is favorable or unfavorable) d. If the company's actual Wages expense for November was $76,200, then the spending variance for Wages expense for November would have been (indicate the amount and whether the variance is favorable or unfavorable). e. Explain the cause of the activity variance and also for the spending variance
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