Question
sally co.. provides house cleaning services. The company uses the number of jobs to measure activity. At the beginning of April, the company budgeted for
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sally co.. provides house cleaning services. The company uses the number of jobs to measure activity. At the beginning of April, the company budgeted for 80 jobs, but the actual number of jobs turned out to be 90. A report comparing the budgeted revenues and costs to the actual revenues and costs appears below:
sally Co.
For the Month Ended April 30
Revenue/Cost
Formulas
Actual
Results
Planning
Budget
Number of jobs (Q)
90
80
Revenue
$100Q
8,900
8,000
Expenses:
Variable expenses
?
3,800
3,200
Fixed expense
?
2,100
2,500
Total expenses
5,900
5,700
Net operating income
3,000
2,300
What is the amount of activity variance for variable expenses in Sally's performance report for April?
A. $400 unfavorable
B. $600 favorable
C. $600 unfavorable
D. $400 favorable
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