Acquired in advance of usage

Lease Cost $ 48,000 (4 welding units x $12.000 lease cost)

Salaries $ 300,000 (6 welding employees x $50.000 salar
Total Fixed Cost $ 348,000

Acquired as needed
Welding Supplies $ 100 ($300 per job / 3 hours used per job)

Formula :
Welding Cost = $ 348,000 + $100X (X refers to welding hours)

2 Activity-Based Perforrmance Report

Activity Actual Cost Budgeted Cost(90%) Budget Variance
Welding
Fixed Cost $ 363,000 $ 348,000 $ 15,000 U
Variable Cost $ 805,000 $ 810,000 $ 5,000 F

the Lease Cost or the Welding Equipment is fixed, while the variable cost
3 include the salary of welders from outside $ 30 plus $100 per hours for part
and Supplies.

Formula = $ 348,000 + $130X

nits x $12.000 lease cost)
mployees x $50.000 salary)

b / 3 hours used per job)

welding hours)