Reference no: EM132487241
Accounting Information:
The budgeted variable cost per pound of laundry is $0.072
The actual variable cost per pound of laundry is $0.0799
The budgeted volume is 125,000 pounds
The actual volume is 156,600 pounds.
Budgeted fixed cost is $4,000
Actual fixed cost is $4,000
Based on the above figures find the following:
- original (static) budgeted expense
- actual expenses.
- flexible budget expense. (Find total expenses, not expenses per pound of laundry)
Question 1: How much of the total expense variance can be explained by the fact that the laundry produced more output than budgeted?
Question 2: How much of the expense variance can be explained by factors other than the fact the laundry produced more output than budgeted?
Question 3: Are the formulas for expense and revenue variances exactly the same?