Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 36300 customers but actually served 27,900 customers. The company uses the following revenue and cost formules number of customers served budgeting where the Revenue: $4,600 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 (.e., zero variance). Input all amounts as positive values.
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.
![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 formules in its budgeting, where 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 (.e., zero
variance). Input all amounts as positive values.
Customers served
Revenue
Expenses:
Wages and salaries
Supplies
Insurance
Miscellaneous expense
Total expense
Net operating income
Arrasmith Corporation
Flexible Budget Performance Report
For the Month Ended February 28
Actual
Results
27,900
Revenue and Spending
Variances
Flexible
Budget
27,900
Activity Variances
Planning
Budget
36,100](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F480241b2-49a0-47ad-9a69-d19829cc9338%2Fc617b6a7-4626-4dcb-a2ce-d2b38a168b40%2F9gdqy9_processed.jpeg&w=3840&q=75)
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