Ruozzo Corporation Is a Service Company That Measures Its Output

question 127

Multiple Choice

Ruozzo 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 July. When the company prepared its planning budget at the beginning of July, it assumed that 27 customers would have been served. However, 22 customers were actually served during July.
The activity variance for net operating income for July would have been closest to:

• A) $16,400 F
• B) $15,500 F
• C) $15,500 U
• D) $16,400 U

---

Definitions:

Laid Off

The temporary or permanent termination of employment, typically due to economic conditions or company restructuring, not related to the worker's performance.

Modeling Job

Employment in the field of fashion or advertisement where individuals showcase clothing, accessories, or other products.

Consumer Price Index

An indicator that measures the average change over time in the prices paid by consumers for a basket of goods and services.

Base Year

A specific year against which economic growth or other economic indicators are measured, serving as a comparison for subsequent years' data.