Figure 16-2
Glenn, SA Following Are the Actual Costs of Producing 75,000 T-Shirts: 5,000

question 58

Multiple Choice

Figure 16-2
Glenn, SA., has done a cost analysis for its production of T-shirts. The following activities and cost drivers have been developed: $\begin{array}{ll}\text { Activity } & \text { Cost Formula } \\\text { Maintenance } & £ 11,000+£ 2 \text { per machine hour } \\\text { Machining } & £ 55,000+£ 3 \text { per machine hour } \\\text { Inspection } & £ 70,000+£ 500 \text { per batch } \\\text { Setups } & £ 2,000 \text { per batch } \\\text { Purchasing } & £ 80,000+£ 150 \text { per purchase order }\end{array}$ Following are the actual costs of producing 75,000 T-shirts: 5,000 machine hours; 10 batches; 20 purchase orders $\begin{array}{lr}\text { Maintenance } & £ 20,000 \\\text { Machining } & 73,000 \\\text { Inspection } & 73,000 \\\text { Setups } & 18,000 \\\text { Purchasing } & 82,000\end{array}$
-Refer to Figure 16-2. What is the budget variance for inspection in an activity-based performance report?

• A)£1,000 F
• B)£2,000 F
• C)£3,000 F
• D)none of the above

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Definitions:

Usage Rate

The frequency with which consumers use a product, often used to segment markets or tailor marketing strategies.

Psychographics

The study and classification of people according to their attitudes, aspirations, and other psychological criteria, especially in market research.

Psychographic Segmentation

The process of dividing a market into segments based on consumer personalities, values, attitudes, interests, or lifestyles.

U.S. Census Bureau

A principal agency of the U.S. Federal Statistical System responsible for producing data about the American people and economy.