Use the Following Information for the Next 2 Questions

question 36

Multiple Choice

Use the following information for the next 2 questions.
Flowing Wells Corporation is preparing its annual budget. As part of its analysis of the contribution of individual products to overall profitability, the controller estimates the amount of overhead that should be assigned to the individual product lines. Budgeted inspection costs are $4,800. Additional information is as follows:
-Costs assigned to an activity pool for teaching children to swim at the county park are $2,700 per month. Number of students is chosen as the cost driver. On average, 300 students take swim lessons monthly. What is the ABC allocation rate for this activity?

• A) Not enough information given
• B) $27.00
• C) $9.00
• D) $0.90

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Definitions:

Revenue Variance

The difference between actual revenue earned and expected revenue, often used in budgeting and financial analysis.

Materials Price Variance

The difference between the actual cost of raw materials used in production and the expected (or standard) cost of those materials.

Raw Materials Quantity

The amount or volume of raw materials required or used in the production process, often measured to assess inventory needs and costs.

Variance

The difference between planned or expected performance and the actual outcome.