In: Accounting
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 |
Account inquiry |
$76,416 |
$150,000 |
3,200 labor hours |
Correspondence |
$10,063 |
$24,000 |
2,900 letters |
Account billing |
$182,000 |
$82,000 |
2,600,000 lines |
Bill verification |
$10,750 |
$79,000 |
21,500 accounts |
In September, actual costs and activity were as follows:
Activity Center |
Total Costs |
Driver Amount |
Account inquiry |
$224,331 |
3,080 labor hours |
Correspondence |
$34,101 |
2,990 letters |
Account billing |
$253,415 |
2,450,000 lines |
Bill verification |
$89,846 |
21,320 accounts |
Required
Compute the flexible-budget variances for the following two
activity cost items (round all answers to the nearest dollar and
enter favorable variances as positive numbers and unfavorable
variances as negative numbers):
Account inquiry:
Correspondence: