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13 January, 10:41

Taylor Midwifery's cost formula for its wages and salaries is $1,540 per month plus $497 per birth. For the month of March, the company planned for activity of 112 births, but the actual level of activity was 107 births. The actual wages and salaries for the month was $56,850. The activity variance for wages and salaries in March would be closest to:

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  1. 13 January, 11:21
    0
    Activity variance = $2485 F

    Explanation:

    given data

    wages and salaries = $1,540 per month

    per birth = $497

    activity = 112 births

    actual wages and salaries = $56,850

    to find out

    activity variance for wages and salaries in March

    solution

    we get here Wages and salaries in Planning budget is here express as

    Wages and salaries in Planning budget = 1540 + (497 * 112)

    Wages and salaries in Planning budget = $57204 ... 1

    and

    Wages and salaries in Flexible budget will be here

    Wages and salaries in Flexible budget = 1540 + (497 * 107)

    Wages and salaries in Flexible budget = $54719 ... 2

    so Activity variance will be difference of equation 1 and 2

    Activity variance = $57204 - $54719

    Activity variance = $2485 F
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