Bienestar, Inc., has done a cost analysis for its production of vests. The following activities...
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Bienestar, Inc., has done a cost analysis for its production of vests. The following activities and cost drivers have been developed:
| Activity | Cost Formula |
| Maintenance | $11,000 + $2 per machine hour |
| Machining | $55,000 + $3 per machine hour |
| Inspection | $70,000 + $500 per batch |
| Setups | $2,000 per batch |
| Purchasing | $80,000 + $150 per purchase order |
Following are the actual costs of producing 75,000 vests: 5,000 machine hours; 10 batches; 20 purchase orders
| Maintenance | $20,000 |
| Machining | 73,000 |
| Inspection | 73,000 |
| Setups | 18,000 |
| Purchasing | 82,000 |
What is the budget variance for inspection in an activity-based performance report?
| a. | $1,000 F | |
| b. | $2,000 F | |
| c. | $3,000 F | |
| d. | none of these |
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