Question
A&B Co. provides house cleaning services. The company uses the number of jobs to measure activity. At the beginning of April, the company budgeted for
A&B Co. provides house cleaning services. The company uses the number of jobs to measure activity. At the beginning of April, the company budgeted for 80 jobs, but the actual number of jobs turned out to be 90. A report comparing the budgeted revenues and costs to the actual revenues and costs appears below:
| A&B Co. | ||||
| For the Month Ended April 30 | ||||
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| Revenue/Cost Formulas | Actual Results | Planning Budget |
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| Number of jobs (Q) |
| 90 | 80 | |
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| Revenue | $100Q | 8,900 | 8,000 | |
| Expenses: |
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| Variable expenses | ? | 3,800 | 3,200 |
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| Fixed expense | ? | 2,100 | 2,500 |
| Total expenses |
| 5,900 | 5,700 | |
| Net operating income |
| 3,000 | 2,300 | |
What is the amount of activity variance for revenue in A&Bs performance report for April?
| A. | $1,000 favorable | |
| B. | $900 favorable | |
| C. | $1,000 unfavorable | |
| D. | $900 unfavorable |
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