Question

Bade Midwifery's cost formula for its wages and salaries is $1,220 per month plus $246 per birth. For the month of October, the company planned for activity of 106 births, but the actual level of activity was 102 births. The actual wages and salaries for the month was $27,250. The activity variance for wages and salaries in October would be closest to:

Answer 1

Answer:

wages and salaries activity variance= $938 unfavorable

Explanation:

Giving the following information:

Standard:

Fixed= $1,220

Variable= $246 er birth

Actual:

102 births.

The actual wages and salaries for the month was $27,250.

To calculate the activity variance for wages, we need to use the following formula:

wages and salaries activity variance= (actual costs - standards costs)

standards= 1,220 + 246*102= $26,312

wages and salaries activity variance= (27,250 - 26,312)

wages and salaries activity variance= $938 unfavorable