Answered step by step
Verified Expert Solution
Question
1 Approved Answer
LPM Ltd. uses units produced as its measure of activity. During August, the company budgeted for 46,700 units of output, but actually produced 48,900 units
LPM Ltd. uses units produced as its measure of activity. During August, the company budgeted for 46,700 units of output, but actually produced 48,900 units of output. The company uses the following revenue and cost formulas in its budgeting, where q is the number of units of output: Revenue: $11.609 Salaries: $31,050 + $2.45q Supplies: $1.254 Utilities: $0.609 Insurance: $23,090 Miscellaneous expenses: $13,800 + $0.219 The company reported the following actual results for August: Revenue $611,250 Salaries $148,360 Supplies $ 55,795 Utilities $ 31,920 Insurance $ 22,100 Miscellaneous expense $ 20,845 The activity variance in August for 'Salaries' is: a. $5,390 U b. $2,495 F C. $5,390 F d. $2,495 U e. $2,895 U Clyde's Critter Care bases its budgets on the activity measure animal-visits. During December, the clinic planned for 870 animal-visits, but its actual level of activity was 800 animal-visits. The clinic has provided the following data concerning the formulas it uses in its budgeting: Fixed element per month Revenue Wages $ 11,450 Variable element per patient-visit $ 75.00 $ 9.00 $ 3.60 $ 1.95 $ 0.80 $ 6.30 Medical supplies Occupancy expenses Administrative expenses $ 5,400 $11,750 Miscellaneous expenses 'Wages' in the planning budget for December would be: a. $17,320 b. $19,280 C. $18,650 d. $18,836
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started