Shelby Boat Wash's cost formula for its cleaning equipment and supplies is $2, 200 per month plus $34 per boat.For the month of September, the company planned for activity of 82 boats, but the actual level of activity was 32 boats.The actual cleaning equipment and supplies for the month was $3, 340. The activity variance for cleaning equipment and supplies in September would be closest to:

Question

Quizplus · Accepted Answer

The activity variance is the difference between the actual cost and the budgeted cost, which is caused by the difference between the actual activity level and the budgeted activity level. In this case, the budgeted cost is $2,200 + $34 * 82 = $3,548, and the actual cost is $3,340. The actual activity level is 32 boats, which is 50 boats less than the budgeted activity level. Therefore, the activity variance is $3,548 - $3,340 = $1,700 F.

Shelby Boat Wash's Cost Formula for Its Cleaning Equipment and Supplies