Davis Industries' Activity-Based Performance Report Revealed That Actual Inspection Costs

question 3

Essay

Davis Industries' activity-based performance report revealed that actual inspection costs totaled £225,000 at an actual activity level of 80 inspections. Further analysis of inspection costs revealed the following: $\begin{array}{l}&\text { Actual Cost } & \text { Budgeted Cost } \\\text { Inspection costs: }\\\text { Fixed } & £ 90,000 & £ 84,000 \\\text { Variable } & 60,000 & 56,000\end{array}$ Fixed inspection costs consist of the salaries of four inspectors, paid £21,000 each. Each inspector is capable of efficiently conducting inspections of 50 batches. Variable inspection costs consist of materials used during the inspections.
a.Calculate the following fixed activity budget variances for inspection:Total fixed activity varianceFixed spending varianceVolume varianceUnused capacity variance
b.Calculate the following variable activity budget variances for inspection:Spending varianceEfficiency variance

---

Definitions:

Fibroblasts

Cells found in connective tissue, responsible for producing collagen and other fibers.

Adipocytes

Cells specialized in storing energy as fat, found mainly in adipose tissue.

Estrogen Levels

The concentration of estrogen hormones in the body, which are critical for sexual and reproductive development and regulation.

Growth Hormone

A peptide hormone produced by the pituitary gland that stimulates growth, cell reproduction, and cell regeneration in humans and other animals.