Question
Milot Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed
Milot 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 April. Fixed Element per Month Variable Element per Well Serviced Actual Total for April Revenue $ 3,800 $ 112,900 Employee salaries and wages $ 41,400 $ 900 $ 69,500 Servicing materials $ 500 $ 15,100 Other expenses $ 29,600 $ 30,200 When the company prepared its planning budget at the beginning of April, it assumed that 32 wells would have been serviced. However, 29 wells were actually serviced during April. The activity variance for total expenses for April would have been closest to: Multiple Choice $4,200 U $1,000 U $1,000 F $4,200 F
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