Ekholm Corporation is a shipping container refurbishment company that measures its output by the number...
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Accounting
Ekholm Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes.
| Fixed Element per Month | Variable Element per Container Refurbished | ||||
| Revenue | $ | 4,400 | |||
| Employee salaries and wages | $ | 44,900 | $ | 1,000 | |
| Refurbishing materials | $ | 700 | |||
| Other expenses | $ | 30,800 | |||
When the company prepared its planning budget at the beginning of December, it assumed that 30 containers would have been refurbished. However, 35 containers were actually refurbished during December.
The activity variance for Employee salaries and wages for December would have been closest to:
Multiple Choice
a) $5,000 U
b) $5,000 F
c) $4,000 U
d) $4,000 F
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