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: Revenue Wages and salaries Supplies Insurance Miscellaneous expense Required: $ 141,800 $ 69,100 $ 15,500 $ 11,500 $ 23,200 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.) Arrasmith Corporation Flexible Budget Performance Report For the Month Ended February 28 Actual Results Revenue and Spending Flexible Variances Budget Activity Variances Planning Budget Customers served 27,900 27,900 36,100 Revenue $141,800 $128,340 Expenses: Wages and salaries 69,100 74,197 Supplies 15,500 23,157 Insurance 11,500 11,500 Miscellaneous expense 23,200 18,939 Total expense 119,300 127,793 Net operating income $ 22,500 $ 53,547
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: Revenue Wages and salaries Supplies Insurance Miscellaneous expense Required: $ 141,800 $ 69,100 $ 15,500 $ 11,500 $ 23,200 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.) Arrasmith Corporation Flexible Budget Performance Report For the Month Ended February 28 Actual Results Revenue and Spending Flexible Variances Budget Activity Variances Planning Budget Customers served 27,900 27,900 36,100 Revenue $141,800 $128,340 Expenses: Wages and salaries 69,100 74,197 Supplies 15,500 23,157 Insurance 11,500 11,500 Miscellaneous expense 23,200 18,939 Total expense 119,300 127,793 Net operating income $ 22,500 $ 53,547
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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:
Revenue
Wages and salaries
Supplies
Insurance
Miscellaneous expense
Required:
$ 141,800
$ 69,100
$ 15,500
$ 11,500
$ 23,200
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.)
Arrasmith Corporation
Flexible Budget Performance Report
For the Month Ended February 28
Actual
Results
Revenue and Spending Flexible
Variances
Budget
Activity Variances
Planning
Budget
Customers served
27,900
27,900
36,100
Revenue
$141,800
$128,340
Expenses:
Wages and salaries
69,100
74,197
Supplies
15,500
23,157
Insurance
11,500
11,500
Miscellaneous expense
23,200
18,939
Total expense
119,300
127,793
Net operating income
$ 22,500
$ 53,547
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