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Business, 06.04.2020 22:37 naomicervero
Milot Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for April.
Fixed Variable Element Actual Total
Element per Well Serviced for April
per Month
Revenue $3,800 $112,900
Employee salaries and wages $41,400 $900 $69,500
Servicing materials $500 $15,100
Other expenses $29,600 $30,200
When the company prepared its planning budget at the beginning of April, it assumed that 32 wells would have been serviced. However, 29 wells were actually serviced during April.
The activity variance for total expenses for April would have been closest to:
a) $4,200 F b) $1,000 F c) $1,000 U d) $4,200 U
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