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Mattison Company has developed cost formulas for the drivers of the following production activities: Driver Activity Fixed Variable Labor hours Materials $ -0- $20 Labor

Mattison Company has developed cost formulas for the drivers of the following production activities:
Driver Activity Fixed Variable
Labor hours Materials $ -0- $20
Labor hours Labor -0- 10
Machine hours Maintenance 10,000 8
Machine hours Machining 50,000 2
Number of setups Inspections 30,000 200
Number of setups Setups -0- 300
Number of purchase orders Purchasing 75,000 3
The activity levels are projected to be as follows:
Labor hours 1,000
Machine hours 5,000
Setups 100
Purchase orders 50
What is budgeted for this projected activity level?
a. $3,504,450
b. $295,150
c. $1,655,430
d. $165,543

If the actual activity was 20 setups and the actual fixed cost for inspections was $28,000 and the variable cost for inspections was $5,000, the total variance for inspections is

a. $2,000 favorable.
b. $2,000 unfavorable.
c. $1,000 favorable.
d. $1,000 unfavorable.

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