Shaak Corporation uses customers served as its measure of activity. The company bases its budgets on the following information:Revenue should be $4.20 per customer served. Wages and salaries should be $21,800 per month plus $1.00 per customer served.Supplies should be $0.70 per customer served. Insurance should be $5,700 per month, Miscellaneous expenses should be $3,900per month plus $0.30 per customer served.The company reported the following actual results for October:Customers servedRevenueWages and salariesSuppliesInsuranceMiscellaneous expenseRequired:22,500$ 137,300$ 40,600$ 16,300$ 5,580$ 7,480Prepare a report showing the company's revenue and spending variances for October. Label each variance as favorable (F) orunfavorable (U).Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zerovariance). Input all amounts as positive values.Shaak CorporationRevenue and Spending VariancesFor the Month Ended October 31Customers servedRevenueExpenses:Wages and salariesSuppliesInsuranceMiscellaneous expenseTotal expenseActual Results22,500Flexible Budget22,500Revenue and SpendingVariances

Part 2: ExplanationStep 1: Calculate the actual revenue:Actual revenue = Customers served * Revenue…

Answered: Shaak Corporation uses customers served…

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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Dinham Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During March, the kennel budgeted for 4,500 tenant-days, but its actual level of activity was 4,560 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Fixed element per month Variable element per tenant-day Revenue 0 $ 35.00 Wages and salaries $ 3,400 $ 8.40 Food and supplies 2,400 14.90 Facility expenses 8,900 3.90 Administrative expenses 7,400 0.30 Total expenses $ 22,100 $ 27.50 Actual results for March: Revenue $ 142,130 Wages and salaries $ 28,640 Food and supplies $ 71,025 Facility expenses $ 26,125 Administrative expenses $ 7,104 The spending variance for food and supplies in March would be closest to:
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