A company bases its budgets on the activity measure customers served. During September, the company planned to serve 38,000 customers, but actually served 33,000 customers. Revenue is $3.96 per customer served. Wages and salaries are $35,700 per month plus $1.36 per customer served. Supplies are $0.66 per customer served. Insurance is $9,900 per month. Miscellaneous expenses are $8,000 per month plus $0.36 per customer served. Required: Prepare a report showing the company's static budget variance for September. Indicate in each case whether the variance is favorable (F) or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values and enter any losses with a minus sign.) Customers served Revenue Expenses: Wages and salaries Supplies Insurance Miscellaneous expense Total expense Net operating income (loss) Varcoe Corporation Static Budget Variance For the Month Ended September 30 Planning Budget Flexible Budget 33,000 38,000 Static Budget Variance
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
![A company bases its budgets on the activity measure customers served. During September, the
company planned to serve 38,000 customers, but actually served 33,000 customers. Revenue is
$3.96 per customer served. Wages and salaries are $35,700 per month plus $1.36 per customer
served. Supplies are $0.66 per customer served. Insurance is $9,900 per month. Miscellaneous
expenses are $8,000 per month plus $0.36 per customer served.
Required:
Prepare a report showing the company's static budget variance for September. Indicate in each
case whether the variance is favorable (F) or unfavorable (U). (Indicate the effect of each
variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero
variance). Input all amounts as positive values and enter any losses with a minus sign.)
Customers served
Revenue
Expenses:
Wages and salaries
Supplies
Insurance
Miscellaneous expense
Total expense
Net operating income (loss)
Varcoe Corporation
Static Budget Variance
For the Month Ended September 30
Flexible
Budget
33,000
Planning
Budget
38,000
Static Budget Variance
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