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Figure 16-4
Villafane, SA Following Are the Actual Costs of Producing 35,000 Decals: 1,000

question 34

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Figure 16-4
Villafane, SA., has done a cost analysis for its production of decals. The following activities and cost drivers have been developed:  Activity  Cost Formula  Design £5,000+£0.05 per machine hour  Machining £25,000+£0.01 per machine hour  Setups £35 per batch  Purchasing £50+£15 per purchase order \begin{array}{ll}\text { Activity } & \text { Cost Formula } \\\text { Design } & £ 5,000+£ 0.05 \text { per machine hour } \\\text { Machining } & £ 25,000+£ 0.01 \text { per machine hour } \\\text { Setups } & £ 35 \text { per batch } \\\text { Purchasing } & £ 50+£ 15 \text { per purchase order }\end{array} Following are the actual costs of producing 35,000 decals: 1,000 machine hours; 5 batches; 30 purchase orders  Design £5,080 Machining ? Setups ? Purchasing £600\begin{array}{lr}\text { Design } & £ 5,080 \\\text { Machining } & ? \\\text { Setups } & ? \\\text { Purchasing } & £ 600\end{array} The following variances were given in the activity performance report:  Design ? Machining £40 F Setups £15 F Purchasing ?\begin{array}{lr}\text { Design } & ? \\\text { Machining } & £ 40 \mathrm{~F} \\\text { Setups } & £ 15 \mathrm{~F} \\\text { Purchasing } & ?\end{array}
-Refer to Figure 16-4. What is the actual cost of setups?


Definitions:

Activity Variance

The difference between the budgeted amount of activity and the actual amount of activity, which can impact costs and operational efficiency.

Cost Formula

An equation used to predict costs at various levels of activity, incorporating both fixed and variable cost components.

Travel Expenses

Costs associated with traveling for business purposes, such as transportation, lodging, and meals.

Variable Cost

A cost that varies with the level of output or production, such as materials or labor costs.

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