Response to the following problem:
Activity-based costing flexible-budget variances for finance-function activities.
FastGrocery.com an online company that delivers groceries to its customers has the following information for its three finance activities in 2008:
|
|
|
|
Rate per Unit of Cost Driver
|
|
Activity
|
Level Activity
|
Driver Cost
|
Static Budget
|
Actual
|
|
Receivables
|
Output unit
|
Remittances
|
$0.639
|
$0.80
|
|
Payables
|
Batch
|
Invoices
|
2.900
|
2.85
|
|
Travel expenses
|
Batch
|
Travel claims
|
7.600
|
7.45
|
The output measure is the number of deliveries, which is the same as the number of remittances. The following is additional information.
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Static-Budget Amounts
|
Actual Amount
|
|
Number of deliveries
|
1,000,000
|
945,000
|
|
Batch size in terms of deliveries:
|
|
|
|
Payables
|
5
|
4.468
|
|
Travel expenses
|
500
|
501.587
|
1. Calculate the flexible-budget variance for each activity in 2008.
2. Calculate the price and efficiency variances for each activity in 2008.