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

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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Shaak Corporation uses customers served as its measure of activity. The company bases its budgets on the following information: Revenue should be $6.30 per customer served. Wages and salaries should be $22,300 per month plus $0.90 per customer served. Supplies should be $0.80 per customer served. Insurance should be $5,950 per month. Miscellaneous expenses should be $4,400 per month plus $0.20 per customer served. The company reported the following actual results for October: Customers served Revenue. Wages and salaries Supplies Insurance Miscellaneous expense Required: Prepare a report showing the company's revenue and spending variances for October. Label each variance as favorable (F) or unfavorable (U). Note: 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. Customers served Revenue Expenses: Wages and salaries Supplies Insurance 22,750 $ 177,300 $ 40,725 $…
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Grohs Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During December, the kennel budgeted for 2,500 tenant-days, but its actual level of activity was 2,530 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: Fixed Element per Month Variable element per tenant-day Revenue $ 0 $33.00 Wages and salaries $ 3,800 $ 7.90 Food and supplies 1,000 11.60 Facility expenses 8,600 2.20 Administrative expenses 6,200 0.20 Total expenses $19,600 $21.90 The net operating income in the planning budget for December would be closest to: Multiple Choice A. $8,150 B. $11,914 C. $8,483 D. $11,633
Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Foundational 9-14 (Algo) Fixed Element per Month $ 55,000 $ 34,000 When preparing its planning budget, the company estimated it would serve 30 customers per month; however, during May the company actually served 35 customers. Answer is complete but not entirely correct. 5,283,600 F Activity variance Variable Element per Customer Served $ 5,600 $ 1,600 $ 850 $ Actual Total for May $ 182,000 $ 110,300 14. What activity variance would Adger report in May with respect to its revenue? Note: 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. $ 27,200 $ 32,600
Hemphill Corporation uses customers served as its measure of activity. During June, the company budgeted for 20,000 customers, but actually served 19,000 customers. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June:Data used in budgeting: Fixed amount per month Variable amount per customer Revenue - $4.50 Wages and salaries $23,900 $1.40 Supplies $0 $0.80 Insurance $5,700 $0.00 Miscellaneous $5,000 $0.40 Actual results for June: Revenue $85,400 Wages and Salaries $52,700 Supplies $17,500 Insurance $5,500 Miscellaneous $12,200 Calculate revenue variance, spending variance for wages and salaries, and spending variance for insurance. Label them as favorable or unfavorable. Please show your workings
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Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 35.100 customers. but actually served 33.400 customers. The company uses the following revenue and cost formulas in its budgeting, where is the number of customers served Revenue: $3.60g Wages and salaries: $33,300+ $113g Supplies: $0.53q Insurance: $10,500 Miscellaneous expenses: $6,500 $0.31 The company reported the following actual results for February $ 121,000 $ 60,100 $ 14,500 $ 10,500 $ 18,200 Revenue Wages and salaris Supplies Insurance Miscellaneous expense Required: Prepare the company's flexible budget performance report for February. Label each variance as favorable (F) or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (Le.. zero variance). Input all amounts as positive values.) Customer served Revenue Expenses: Wages and salaries Supplies Insurance Miscellaneous expense tal…
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Prestridge Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for August. Fixed Element per Variable Element per Actual Total Month Customer Served $ 4,100 $ 1,000 $ 500 for August $ 120,500 $ 71,200 $ 14,800 $ 38,400 Revenue Employee salaries and wages Travel expenses $ 41,500 Other expenses $ 38,900 When the company prepared its planning budget at the beginning of August, it assumed that 31 customers would have been served. However, 29 customers were actually served during August. The activity variance for total expenses for August would have been closest to: Multiple Choice $3,000 F $2,500 F $2,500 U $3,000 U
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