Villafane, SA., has done a cost analysis for its production of decals. The following activities and cost drivers have been developed: Following are the actual costs of producing 35,000 decals: 1,000 machine hours; 5 batches; 30 purchase orders
The following variances were given in the activity performance report:
What is the actual cost of machining?

A) £24,970
B) £25,010
C) £25,050
D) none of the above

Question

Villafane, SA., has done a cost analysis for its production of decals. The following activities and cost drivers have been developed: Following are the actual costs of producing 35,000 decals: 1,000 machine hours; 5 batches; 30 purchase orders
 The following variances were given in the activity performance report:
 What is the actual cost of machining?

A) £24,970 
B) £25,010 
C) £25,050 
D) none of the above

Quizplus · Accepted Answer

The actual cost of machining can be calculated by multiplying the actual machine hours (1,000) by the actual rate per machine hour (£24.97) which gives us £24,970. Therefore, the correct answer is A.