Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 35.900 customers, but actually served 28,600 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $4,40q Wages and salaries: $34,100+ $1.37q Supplies: $0.77q Insurance: $11,300 Miscellaneous expenses: $7,300 + $0.39q The company reported the following actual results for February. $ 137,800 $ 68,900 $ 15,300 Revenue Hages and salaries Supplies Insurance Miscellaneous expense 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.) Customers served Revenue Expenses Wages and salarios Supplies Ineurance $ 11,300 $ 22,200 Arrasmith Corporation Flexible Budget Performance Report For the Month Ended February 28 Actual Results 28,600 Revenue and Spending Variances Flexible Budget 28,600 Activity Variances Planning Budget 35,900
Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 35.900 customers, but actually served 28,600 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $4,40q Wages and salaries: $34,100+ $1.37q Supplies: $0.77q Insurance: $11,300 Miscellaneous expenses: $7,300 + $0.39q The company reported the following actual results for February. $ 137,800 $ 68,900 $ 15,300 Revenue Hages and salaries Supplies Insurance Miscellaneous expense 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.) Customers served Revenue Expenses Wages and salarios Supplies Ineurance $ 11,300 $ 22,200 Arrasmith Corporation Flexible Budget Performance Report For the Month Ended February 28 Actual Results 28,600 Revenue and Spending Variances Flexible Budget 28,600 Activity Variances Planning Budget 35,900
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:Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 35.900
customers, but actually served 28,600 customers. The company uses the following revenue and cost formulas in its budgeting, where
q is the number of customers served:
Revenue: $4,40q
Wages and salaries: $34,100+ $1.37q
Supplies: $0.77q
Insurance: $11,300
Miscellaneous expenses: $7,300 + $0.39q
0
The company reported the following actual results for February
$ 137,800
$ 68,900
Revenue
Hages and salaries
Supplies
Insurance
Miscellaneous expense
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.)
Customers served
Revenue
Expenses
Wages and salarios
Supplies
Ineurance
$ 15,300
$ 11,300
$ 22,200
Arrasmith Corporation
Flexible Budget Performance Report
For the Month Ended February 28
Actual
Results
28,600
Revenue and Spending
Variances
Flexible
Budget
28,600
Activity Variances
Planning
Budget
35,900
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