Villanova, Inc $\quad \$ 5,000 + \$ 0.05$ Per Machine Hour
Machining

Multiple Choice

Villanova, Inc., has done a cost analysis for its production of rubber stamps. The following activities and cost drivers have been developed: Activity
Cost Formula
Design $\quad \$ 5,000 + \$ 0.05$ per machine hour
Machining $\quad \$ 25,000 + \$ 0.01$ per machine hour
Setups $\quad \$ 35$ per batch
Purchasing $\quad \$ 50 + \$ 15$ per purchase order
Following are the actual costs of producing 35,000 rubber stamps: 1,000 machine hours; 5 batches; 30 purchase orders
$\begin{array} { l r } \text { Design } & \$ 5,080 \\ \text { Machining } & ? \\ \text { Setups } & ? \\ \text { Purchasing } & \$ 600 \end{array}$
The following variances were given in the activity performance report:
Design
?
Machining $\quad \$ 40 \mathrm {~F}$
Setups $\quad \$ 15 \mathrm {~F}$
Purchasing
? What is the activity variance for purchasing?

A) $500 U
B) $100 U
C) $50 U
D) none of these