Rients Corporation Is a Service Company That Measures Its Output

question 121

Multiple Choice

Rients Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for October. When the company prepared its planning budget at the beginning of October, it assumed that 39 customers would have been served. However, 44 customers were actually served during October.
The spending variance for "Travel expenses" for October would have been closest to:

• A) $300 F
• B) $300 U
• C) $3,200 F
• D) $3,200 U

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Definitions:

Probability

The extent to which an event is likely to occur, measured by the ratio of the favorable cases to the whole number of cases possible.

Confidence Interval

A range of values, derived from sample statistics, that is believed to contain the true value of an unknown population parameter with a certain degree of confidence.

Standard Deviation

A statistic that measures the dispersion or spread of a set of data points relative to its mean.

Point Estimate

A single value (or point) estimate derived from sample data to approximate a population parameter.