Sammy Three Fingers Diaper Service cost formula for its supplies cost is $2,500 per month plus $10 per diaper change

Accounting Nov 30, 2020

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

Expert Solution

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

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