Roger Company planned to produce 12,000 units.Processing required 16,000 machine hours at a cost of $15,000 + $10.50 per machine hour.Actual sales were 14,000 units requiring 20,000 machine hours.Actual processing cost was $222,000._____ is the activity-level variance for processing.
A)$39,000 favorable
B)$39,000 unfavorable
C)$42,000 favorable
D)$42,000 unfavorable

Question

Quizplus · Accepted Answer

The activity-level variance is calculated as the difference between the actual cost and the budgeted cost, which is (222,000 - (15,000 + (10.50 * 20,000))) = $42,000 unfavorable.

Roger Company Planned to Produce 12,000 Units