Bienestar, Inc Following Are the Actual Costs of Producing 75,000 Vests: 5,000

question 157

Multiple Choice

Bienestar, Inc., has done a cost analysis for its production of vests. The following activities and cost drivers have been developed: $\begin{array} { l l } \text { Activity } & \text { Cost Formula } \\ \text { Maintenance } & \$ 11,000 + \$ 2 \text { per machine hour } \\ \text { Machining } & \$ 55,000 + \$ 3 \text { per machine hour } \\ \text { Inspection } & \$ 70,000 + \$ 500 \text { per batch } \\ \text { Setups } & \$ 2,000 \text { per batch } \\ \text { Purchasing } & \$ 80,000 + \$ 150 \text { per purchase order } \end{array}$
Following are the actual costs of producing 75,000 vests: 5,000 machine hours; 10 batches; 20 purchase orders
$\begin{array}{lr}\text { Maintenance } & \$ 20,000 \\\text { Machining } & 73,000 \\\text { Inspection } & 73,000 \\\text { Setups } & 18,000 \\\text { Purchasing } & 82,000\end{array}$ What is the budget variance for machining in an activity-based performance report?

• A)$1,000 U
• B)$2,000 U
• C)$3,000 U
• D)none of these

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Definitions:

Arithmetic Operations

Basic mathematical operations including addition, subtraction, multiplication, and division.

Quantitative

Pertaining to the measurement or quantity of something, often involving numbers and statistical analysis.

Variable

An attribute or characteristic that can vary among subjects in a study, often classified as dependent or independent.

Quantitative Variable

A variable that can be measured and quantified, often expressed in numerical terms.