Question
The following is total monthly budgeted cost and activity information for the four activity centers in the billing department of Oregon Power Company: Activity Center
The following is total monthly budgeted cost and activity information for the four activity centers in the billing department of Oregon Power Company:
Activity Center | Variable | Fixed | Cost Driver |
Statement inquiry | $84,728 | $158,000 | 3,400 labor hours |
Correspondence | $9,976 | $20,000 | 2,900 letters |
Account billing | $144,000 | $71,000 | 2,400,000 lines |
Payment verification | $11,880 | $80,000 | 22,000 accounts |
In September, actual total costs and activity were as follows:
Activity Center | Total Costs | Driver Amount |
Statement inquiry | $239,363 | 3,270 labor hours |
Correspondence | $29,482 | 2,720 letters |
Account billing | $220,738 | 2,490,000 lines |
Payment verification | $92,167 | 22,120 accounts |
Required Compute the flexible-budget variances for the following two activity cost items (round unit costs to two decimal places and enter favorable variances as positive numbers and unfavorable variances as negative numbers): Payment verification Statement inquiry
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