Schriever 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. Fixed element per monthVariable Element per Well ServicedRevenue $4,500Employee salaries and wages$57,200 $1,100Servicing materials $600Other expenses$31,000 ?The planning budget for May was based on 36 wells serviced, but a total of 31 wells were actually serviced in May.?The activity variance for net operating income for May would have been closest to:
A. $14,000 U
B. $9,800 U
C. $14,000 F
D. $9,800 F
Answer: A
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