Question
Grinzaid Home Nursing specializes in home nursing services. It bases its overhead on the flexible budget cost function of $33,000 + ($2.40 labor hours).
Grinzaid Home Nursing specializes in home nursing services. It bases its overhead on the flexible budget cost function of $33,000 + ($2.40 × labor hours).
Normal volume is based on 12,000 labor hours. Standards call for 2 labor hours per patient visited.
For the current period, the operating results were as follows:
How much of the budget variance is due to variable costs?
Actual labor hours worked Patient visits Actual variable overhead costs Actual fixed overhead costs 11,400 5,800 $28,460 $31,950
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