Wilson's Catering budgeted total variable costs of $19,800 for six people working 40 hours per week over a five-week period. At the end of the five weeks, Wilson's had incurred $21,000 of actual expenses and employees had worked 1,300 hours. In determining performance in controlling costs for the period, the company was
A) $450 under budget.
B) $450 over budget.
C) $1,200 under budget.
D) $1,200 over budget.
E) none of the above.

Question

Quizplus · Accepted Answer

Wilson's Catering budgeted $19,800 of variable costs for 1,200 hours (6 people x 40 hours/week x 5 weeks). Actual costs were $21,000 for 1,300 hours. The budget variance is $21,000 - $19,800 = $1,200 unfavorable.

Wilson's Catering Budgeted Total Variable Costs of $19,800 for Six