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 that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element Variable Element per Customer per Month $ 69,000 Served $ 6,200 $1,600 Actual Total for May $196,000 $ 122,900 $ 610 $ 17,700 $ 48,000 $ 45,200 When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers. 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. Spending variance
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 that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element Variable Element per Customer per Month $ 69,000 Served $ 6,200 $1,600 Actual Total for May $196,000 $ 122,900 $ 610 $ 17,700 $ 48,000 $ 45,200 When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers. 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. Spending variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text: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 that it uses for budgeting purposes and the actual
results for May as shown below:
Fixed Element
Variable Element
per Customer
Actual Total for
per Month
Served
May
Revenue
$ 6,200
$ 196,000
Employee salaries and wages
$ 69,000
$ 1,600
$122,900
Travel expenses
$ 610
$ 17,700
Other expenses
$ 48,000
$ 45,200
When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during
May the company actually served 35 customers.
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 (.e., zero
variance). Input all amounts as positive values.
Spending variance
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