ABC Corporation uses customers served as its measure of activity. During February, the company budgeted for 37,000 customers, but actually served 27,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $5.50q Wages and salaries: $35,200 + $1.70q Supplies: $1.10q Insurance: $12,400 Miscellaneous expenses: $8,400 + $0.50q The company reported the following actual results for February: Revenue $ 159,800 Wages and salaries $ 70,000 Supplies $ 16,400 Insurance $ 12,400 Miscellaneous expense $ 27,700 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 (i.e., zero variance). Input all amounts as positive values.)
ABC Corporation uses customers served as its measure of activity. During February, the company budgeted for 37,000 customers, but actually served 27,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $5.50q Wages and salaries: $35,200 + $1.70q Supplies: $1.10q Insurance: $12,400 Miscellaneous expenses: $8,400 + $0.50q The company reported the following actual results for February: Revenue $ 159,800 Wages and salaries $ 70,000 Supplies $ 16,400 Insurance $ 12,400 Miscellaneous expense $ 27,700 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 (i.e., zero variance). Input all amounts as positive values.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:ABC Corporation uses customers served as its measure
of activity. During February, the company budgeted for
37,000 customers, but actually served 27,000
customers. The company uses the following revenue
and cost formulas in its budgeting, where q is the
number of customers served: Revenue: $5.50q Wages
and salaries: $35,200 + $1.70q Supplies: $1.10q
Insurance: $12,400 Miscellaneous expenses: $8,400 +
$0.50q The company reported the following actual
results for February: Revenue $ 159,800 Wages and
salaries $ 70,000 Supplies $ 16,400 Insurance $ 12,400
Miscellaneous expense $ 27,700 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 (i.e., zero variance). Input all
amounts as positive values.)
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