Lubinsky Corporation Is an Oil Well Service Company That Measures

Essay

Lubinsky Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes.
When the company prepared its planning budget at the beginning of August, it assumed that 28 wells would have been serviced. However, 31 wells were actually serviced during August.
Required:
Prepare a report showing the company's activity variances for August. Indicate in each case whether the variance is favorable (F) or unfavorable (U).