Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 36,100 customers, but actually served 27,900 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $4.60q Wages and salaries: $34,300+ $1.43q Supplies: $0.83q Insurance: $11,500 Miscellaneous expenses: $7,500+ $0.419 The company reported the following actual results for February: $ 141,800 $ 69,100 $ 15,500 Revenue Wages 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). 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. Customers served Revenue Expenses: Wages and salaries Supplies Insurance Miscellaneous expense $ 11,500 $ 23,200 Arrasmith Corporation Flexible Budget Performance Report For the Month Ended February 28 Actual Results 27,900 Revenue and Spending. Flexible Variances. Budget 27,900 Activity Variances Planning. Budget 36,100
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.
Vishnu
![Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 36,100 customers,
but actually served 27,900 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the
number of customers served:
Revenue: $4.60q
Wages and salaries: $34,300 + $1.43q
Supplies: $0.83q
Insurance: $11,500
Miscellaneous expenses: $7,500 + $0.41q
The company reported the following actual results for February:
$ 141,800
$ 69,100
$ 15,500
$ 11,500.
$ 23,200
Revenue
Wages 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).
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.
Customers served
Revenue
Expenses:
Wages and salaries
Supplies
Insurance
Miscellaneous expense
Arrasmith Corporation
Flexible Budget Performance Report
For the Month Ended February 28
Actual
Results
27,900
Revenue and Spending Flexible
Variances
Budget
27,900
Activity Variances
Planning.
Budget
36,100](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd17f3181-b9b6-42c0-81af-8b25513c8273%2F3eefe913-ae30-402c-9e92-2ce18653158b%2F7hoyy1u_processed.jpeg&w=3840&q=75)
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