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.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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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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