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Cinderella Sanitation Service cost formula for its wages and salaries is $2,500 per month plus $75 per pick-up
Cinderella Sanitation Service cost formula for its wages and salaries is $2,500 per month plus $75 per pick-up. For the month of May, the company planned for activity of 300 pick-ups, but the actual level of activity was 325 pick-ups. The actual wages and salaries for the month was $28,875. The activity variance for wages and salaries in May would be closest to: Actual Cost Flex Budget Planning Budget
Q3. Cinderella Sanitation Service cost formula for its wages and salaries is $2,500 per month plus $75 per pick-up. For the month of May, the company planned for activity of 300 pick-ups, but the actual level of activity was 325 pick-ups. The actual wages and salaries for the month was $28,875. The spending variance for wages and salaries in May would be closest to: Actual Cost Flex Budget Planning Budget
Expert Solution
2)
| Actual Cost | Flex Budget | Planning Budget | |
| Wages and salaries | $28,875 | (325*$75+$2,500)= $26,875 | (300*$75+$2500)= $25,000 |
Activity variance= Flex Budget-Planning Budget
= $26,875-25000= $1,875 U
3)
| Actual Cost | Flex Budget | Planning Budget | |
| Wages and salaries | $28,875 | (325*$75+$2500)= $26,875 | (300*$75+$2,500)= $25,000 |
Spending variance= Actual cost-Flex Budget
= $28,875-26,875= $2,000 U
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