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Homework answers / question archive / Sammy Three Fingers Diaper Service cost formula for its supplies cost is $2,500 per month plus $10 per diaper change
Sammy Three Fingers Diaper Service cost formula for its supplies cost is $2,500 per month plus $10 per diaper change. For the month of September, the company planned for activity of 600 diaper changes, but the actual level of activity was 666 changes. The actual supplies cost for the month was $9,980. The supplies cost in the planning budget for September would be closest to: Actual Cost Flex Budget Planning Budget
Q5. Sammy Three Fingers Diaper Service cost formula for its supplies cost is $2,500 per month plus $10 per diaper change. For the month of September, the company planned for activity of 600 diaper changes, but the actual level of activity was 666 changes. The actual supplies cost for the month was $9,980. The activity variance in September would be closest to: Actual Cost Flex Budget Planning Budget
Q6. Sammy Three Fingers Diaper Service cost formula for its supplies cost is $2,500 per month plus $10 per diaper change. For the month of September, the company planned for activity of 600 diaper changes, but the actual level of activity was 666 changes. The actual supplies cost for the month was $9.980. The spending variance in September would be closest to: Actual Cost Flex Budget Planning Budget
Q7. No Peanuts Airlines uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $50,500 per month plus $1,500 per flight plus $2 per passenger. The company. expected its activity in April to be 73 flights and 223 total passengers, but the actual activity was 72 flights and 228 total passengers. The actual cost for plane operating costs in April was $179,020. The activity variance for plane operating costs in April would be closest to: Actual Cost Flex Budget Planning Budget
The formula for supplies cost
=a+bX
a= fixed cost = $2,500
b= variable cost per unit = $10 per unit
X= number of units
Actual Cost = $9,980
Flexible budget = budgeted cost* actual units
=$2,500+($10*666)
=$2,500+$6,660
=$9,160
Planned budget = $2,500+ ($10*600)
=$2,500+6,000
=$8,500
difference between actual cost and flexible cost is spending variance
difference between flexible cost and planned activity is activity variance
| Actual cost | Spending variance | Flexible cost | activity variance | planned budget | |
| $9,980 | $820 unfavorable [$9,980-9160] (Answer 6) | $9,160 | $660 unfavorable [$9,160-$8,500] (Answer 5) | $8,500 (Answer 4) | |
As the actual cost> flexible cost, variance is unfavorable
as the flexible cost> planned cost, variance is unfavorable
