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: Fixed Element per Month Variable Element per Customer Served Actual Total for May Revenue $ 5,600 $ 182,000 Employee salaries and wages $ 55,000 $ 1,600 $ 110,300 Travel expenses $ 850 $ 27,200 Other expenses $ 34,000 $ 32,600 When preparing its planning budget, the company estimated it would serve 30 customers per month; however, during May the company actually served 35 customers. REQUIRED QUESTIONS 12. What amount of travel expenses would be included in Adger’s planning budget for May? 8. What is Adger’s travel expenses spending variance for May? 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. 7. What is Adger’s employee salaries and wages spending variance for May? 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.
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.
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:
| Fixed Element per Month | Variable Element per Customer Served | Actual Total for May | |
|---|---|---|---|
| Revenue | $ 5,600 | $ 182,000 | |
| Employee salaries and wages | $ 55,000 | $ 1,600 | $ 110,300 |
| Travel expenses | $ 850 | $ 27,200 | |
| Other expenses | $ 34,000 | $ 32,600 |
When preparing its planning budget, the company estimated it would serve 30 customers per month; however, during May the company actually served 35 customers.
REQUIRED QUESTIONS
12. What amount of travel expenses would be included in Adger’s planning budget for May?
8. What is Adger’s travel expenses spending variance for May?
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.
7. What is Adger’s employee salaries and wages spending variance for May?
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.
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