The total traceable costs of the account billing activity centre is $245,000. Cost behaviour analysis indicates that fixed costs are $75,000. Activity analysis indicates that the cost driver for account billing activity is the number of lines printed, and the total lines printed is 2,500,000.
-Who is best able to explain the reasons for flexible-budget variances?
A) The company president
B) A salesperson
C) A manufacturing department foreperson
D) A machine operator

Question

Quizplus · Accepted Answer

The manufacturing department foreperson would be best able to explain the reasons for flexible-budget variances as they would have knowledge of the account billing activity centre and its associated costs. Salespeople and machine operators would not have direct involvement with account billing activity, and the company president may not have detailed knowledge of the specific cost drivers and activities of each department.

The Total Traceable Costs of the Account Billing Activity Centre