Rients Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for October. Variable Fixed Element per Element per Customer Actual Total Month Served for October $ 4,100 $ 1,300 $ 700 $ 182,900 $ 98,800 $ 30,500 $ 31,900 Revenue $ 42,300 Employee salaries and wages Travel expenses Other expenses $ 31,500 When the company prepared its planning budget at the beginning of October, it assumed that 39 customers would have been served. However, 44 customers were actually served during October. The spending variance for "Travel expenses" for October would have been closest to:

Rients Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for October. Variable Fixed Element per Element per Customer Actual Total Month Served for October $ 4,100 $ 1,300 $ 700 $ 182,900 $ 98,800 $ 30,500 $ 31,900 Revenue $ 42,300 Employee salaries and wages Travel expenses Other expenses $ 31,500 When the company prepared its planning budget at the beginning of October, it assumed that 39 customers would have been served. However, 44 customers were actually served during October. The spending variance for "Travel expenses" for October would have been closest to:

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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Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 35,500 customers, but actually served 31,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $4.00q Wages and salaries: $33,700 + $1.25q Supplies: $0.65q Insurance: $10,900 Miscellaneous expenses: $6,900 + $0.35q The company reported the following actual results for February: $129,800 $ 68,500 $ 14,900 $ 10,900 $ 20,200 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). (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.)
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