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Annie's Homemade is preparing a planning budget for August. Its budgeted revenue per serving is $5.00. It has identified two cost drivers-number of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee labor-hours in August. Data concerning the company's cost formulas are shown below: Ingredients expense Salaries and wages expense Franchise fee Credit card processing fees Utilities expense Fixed Cost Cost per Cost per Per Month Serving Labor-Hour $ 1.25 $ 7,000 $ 8.00 $ 300 Rent expense $ 3,000 Equipment depreciation expense $1,750 Other expenses $ 4,200 $ 0.25 $ 0.09 $ 0.02 In August, the company actually sold 11,200 servings of ice cream and staffed 780 employee labor-hours. It's budgeted revenue per serving is $5.00. Required: Prepare a flexible budget for August.

Annie's Homemade is preparing a planning budget for August. Its budgeted revenue per serving is $5.00. It has identified two cost drivers-number of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee labor-hours in August. Data concerning the company's cost formulas are shown below: Ingredients expense Salaries and wages expense Franchise fee Credit card processing fees Utilities expense Fixed Cost Cost per Cost per Per Month Serving Labor-Hour $ 1.25 $ 7,000 $ 8.00 $ 300 Rent expense $ 3,000 Equipment depreciation expense $1,750 Other expenses $ 4,200 $ 0.25 $ 0.09 $ 0.02 In August, the company actually sold 11,200 servings of ice cream and staffed 780 employee labor-hours. It's budgeted revenue per serving is $5.00. Required: Prepare a flexible budget for August.

FINANCIAL ACCOUNTING
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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Annie's Homemade is preparing a planning budget for August. Its budgeted revenue per serving is $5.00. It has identified two cost drivers-number of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee labor-hours in August. Data concerning the company's cost formulas are shown below: Ingredients expense Salaries and wages expense Franchise fee Credit card processing fees Utilities expense Rent expense Equipment depreciation expense Other expenses Fixed Cost Cost per Per Month Serving $ 1.25 $7,000 Required: Prepare a flexible budget for August. $ 300 $ 3,000 $ 1,750 $4,200 $ 0.25 $ 0.09 $ 0.02 Cost per Labor-Hour $ 8.00 In August, the company actually sold 11,200 servings of ice cream and staffed 780 employee labor-hours. It's budgeted revenue per serving is $5.00.
Transcribed Image Text:Annie's Homemade is preparing a planning budget for August. Its budgeted revenue per serving is $5.00. It has identified two cost drivers-number of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee labor-hours in August. Data concerning the company's cost formulas are shown below: Ingredients expense Salaries and wages expense Franchise fee Credit card processing fees Utilities expense Rent expense Equipment depreciation expense Other expenses Fixed Cost Cost per Per Month Serving $ 1.25 $7,000 Required: Prepare a flexible budget for August. $ 300 $ 3,000 $ 1,750 $4,200 $ 0.25 $ 0.09 $ 0.02 Cost per Labor-Hour $ 8.00 In August, the company actually sold 11,200 servings of ice cream and staffed 780 employee labor-hours. It's budgeted revenue per serving is $5.00.
Revenue Expenses: Ingredients expense Salaries and wages expense Franchise fee Credit card processing fees Utilities expense Rent expense Equipment depreciation expense Other expenses Total expense Net operating income
Transcribed Image Text:Revenue Expenses: Ingredients expense Salaries and wages expense Franchise fee Credit card processing fees Utilities expense Rent expense Equipment depreciation expense Other expenses Total expense Net operating income
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