Calculate the activity variances for August. **Transcription for Educational Website****Annie’s Homemade Planning Budget for August**Annie’s Homemade is preparing a planning budget for August. The budgeted revenue per serving is $5.00. The company has identified two cost drivers: the number of servings and the number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee labor-hours in August. The cost formulas are detailed below:| Cost Item | Fixed Cost Per Month | Cost per Serving | Cost per Labor-Hour ||---|---|---|---|| Ingredients expense | | $1.25 | || Salaries and wages expense | $7,000 | | $8.00 || Franchise fee | | $0.25 | || Credit card processing fees | | $0.09 | || Utilities expense | $300 | | $0.02 || Rent expense | $3,000 | | || Equipment depreciation expense | $1,750 | | || Other expenses | $4,200 | | |In August, the company actually sold 11,200 servings of ice cream and staffed 780 employee labor-hours. The budgeted revenue per serving is $5.00.**Required:**Calculate the activity variances for August.**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.**Budget Table:**| Item | Flexible Budget | Planning Budget | Activity Variances ||---|---|---|---|| Servings | 11,200 | | || Labor-hours | 780 | | || Revenue | $56,000 | | || **Expenses:** | | | || Ingredients expense | 14,000 | | || Salaries and wages expense | 13,240 | | || Franchise fee | 2,800 | | || Credit card processing fees | 1,008 | | || Utilities expense | 524 | | || Rent expense | 3,000 | | || Equipment depreciation expense | 1,750 | | || Other expenses | 4,200 | | || **Total expense** | 40,522

nhing budget August. Its budgeted revenue per serving drivers-number of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee abor-hours in August. Data concerning the company's cost formulas are shown below: Ingredients expense Salaries and wages expense Franchise fee Fixed Cost Cost per Cost per Per Month Labor-Hour $ 7,000 $ 8.00 Credit card processing fees Utilities expense $300 Rent expense $ 3,000 Equipment depreciation expense $1,750 Other expenses $ 4,200 Serving $ 1.25 cost $ 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: Calculate the activity variances for August. 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.

nhing budget August. Its budgeted revenue per serving drivers-number of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee abor-hours in August. Data concerning the company's cost formulas are shown below: Ingredients expense Salaries and wages expense Franchise fee Fixed Cost Cost per Cost per Per Month Labor-Hour $ 7,000 $ 8.00 Credit card processing fees Utilities expense $300 Rent expense $ 3,000 Equipment depreciation expense $1,750 Other expenses $ 4,200 Serving $ 1.25 cost $ 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: Calculate the activity variances for August. 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.

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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