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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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