Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Lochner Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed

Lochner Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for June.

Fixed Element per Month Variable Element per Well Serviced Actual Total for June
Revenue $ 5,600 $ 148,000
Employee salaries and wages $ 40,600 $ 1,200 $ 73,700
Servicing materials $ 500 $ 13,600
Other expenses $ 42,800 $ 43,300

When the company prepared its planning budget at the beginning of June, it assumed that 24 wells would have been serviced. However, 26 wells were actually serviced during June.

The activity variance for revenue for June would have been closest to:

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Security And Controls Of Windows Active Directory Domains

Authors: Derek Melber

1st Edition

0894135635, 978-0894135637

More Books

Students also viewed these Accounting questions