Rollo Company Has Developed Cost Formulas for the Drivers of the Following

question 94

Multiple Choice

Rollo Company has developed cost formulas for the drivers of the following production activities:
$$\begin{array} { l l c c } \text { Driver } & \text { Activits } & \text { Fixed } & \text { Variale } \\\hline \text { Labour hours } & \text { Materials } & \$ 0 & \$ 20 \\\text { Labour hours } & \text { Labour } & 0 & 10 \\\text { Machine hours } & \text { Maintenance } & 10,000 & 8 \\\text { Machine hours } & \text { Machiring } & 50,000 & 2 \\\text { Number of setups } & \text { Inspections } & 30,000 & 200 \\\text { Number of setups } & \text { Setups } & 0 & 300 \\\text { Number of purchase arders } & \text { Purchasing } & 75,00 & 3\end{array}$$
-Refer to the figure.If the actual activity was 20 setups and the actual fixed cost for inspections was $28,000 and the variable cost for inspections was $5,000,what is the total variance for inspections due to?

• A)favourable variance on fixed costs
• B)unfavourable variance on fixed costs
• C)favourable variance on variable costs
• D)unfavourable variance on variable costs

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Definitions:

Partial Color Blindness

A condition where an individual has difficulty distinguishing between certain colors, as opposed to complete inability.

Protanopia

A type of color blindness characterized by the inability to distinguish between colors within the green-red spectrum due to the absence of red photoreceptors in the eyes.

Pulse Oximetry

Measuring the oxygen saturation of arterial blood in a subject by utilizing a sensor attached typically to a finger, toe, or ear to determine the percentage of oxyhemoglobin in blood pulsating through a network of capillaries and that typically sounds an alarm if the blood saturation becomes less than optimal.

Oxygen Saturation

The percentage of hemoglobin binding sites in the bloodstream occupied by oxygen, an important indicator of respiratory function.