Question
Bienestar, Inc., has done a cost analysis for its production of vests. The following activities and cost drivers have been developed: Activity Cost Formula Maintenance
Bienestar, Inc., has done a cost analysis for its production of vests. The following activities and cost drivers have been developed:
Activity | Cost Formula |
Maintenance | $11,000 + $2 per machine hour |
Machining | $55,000 + $3 per machine hour |
Inspection | $70,000 + $500 per batch |
Setups | $2,000 per batch |
Purchasing | $80,000 + $150 per purchase order |
Following are the actual costs of producing 75,000 vests: 5,000 machine hours; 10 batches; 20 purchase orders
Maintenance | $20,000 |
Machining | 73,000 |
Inspection | 73,000 |
Setups | 18,000 |
Purchasing | 82,000 |
1. What is the budget variance for machining in an activity-based performance report?
a.$2,000 U
b.$3,000 U
c.$1,000 U
d.None of these choices are correct.
2. What is the budget variance for maintenance in an activity-based performance report?
a.$1,000 U
b.$3,000 F
c.$3,000 U
d.None of these choices are correct.
3. What is the budget variance for total costs in an activity-based performance report?
a.$2,000 F
b.$3,000 F
c.$1,000 F
d.None of these choices are correct.
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