Teel Printing uses two measures of activity, press runs and book set-ups, in the cost formulas in its budgets and performance reports. The cost formula for wages and salaries is $8,850 per month plus $400 per press run plus $950 per book set-up. The company expected its activity in July to be 204 press runs and 111 book set-ups, but the actual activity was 201 press runs and 110 book set-ups. The actual cost for wages and salaries in July was $193,780.
-The activity variance for wages and salaries in July would be closest to:
A) $2,150 F
B) $2,120 F
C) $2,150 U
D) $2,120 U

Question

Quizplus · Accepted Answer

11ea7761_1789_a132_81a5_7960c901e839_TB2580_00 Because the flexible budget is less than the planning budget, the variance is favorable (F).

Teel Printing Uses Two Measures of Activity, Press Runs and Book