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A planning budget called for 500 units to be produced and total direct labor cost of $7,500. actual production was 600 units and actual direct labor cost was $9,300. The activity variance is?

Respuesta :

The activity variance is $ 300

What is activity variance?

  • The difference between a revenue or cost item in the flexible budget and the equivalent item in the static planning budget is known as an activity variance.
  • A discrepancy between the actual level of activity employed in the flexible budget and the level of activity assumed in the planned budget is the only cause of an activity variance.

first, we need to calculate the per-hour labor cost.

per-hour labor cost = [tex]\dfrac{ total direct labor cost}{Total units} = \dfrac{7500}{500}[/tex]

per-hour labor cost = $15

Now for 600 units = [tex]15 \times 600 = 9000[/tex]

Activity variance = actual direct labor cost - factual labor cost

Activity variance = 9300 - 9000

Activity variance = 300

To learn more about Activity variance with the given link

https://brainly.com/question/15421743

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