Varcoe Corporation bases its budgets on the activity measure customers served. During September, the company planned to serve 40,000 customers, but actually served 35,000 customers. Revenue is $4.00 per customer served. Wages and salaries are $36,100 per month plus $1.40 per customer served. Supplies are $0.70 per customer served. Insurance is $10,300 per month. Miscellaneous expenses are $8,400 per month plus $0.40 per customer served. Required: Prepare a report showing the company's activity variances for September. Indicate in each case whether the variance is favorable (F) or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values and enter any losses with a minus sign.) Varcoe Corporation Activity Variances For the Month Ended September 30 Customers served Revenue Expenses: Wages and salaries Supplies Insurance Miscellaneous expense Total expense Net operating income (loss) Flexible Budget Planning Budget Activity Variances 35.000 40,000
Varcoe Corporation bases its budgets on the activity measure customers served. During September, the company planned to serve 40,000 customers, but actually served 35,000 customers. Revenue is $4.00 per customer served. Wages and salaries are $36,100 per month plus $1.40 per customer served. Supplies are $0.70 per customer served. Insurance is $10,300 per month. Miscellaneous expenses are $8,400 per month plus $0.40 per customer served. Required: Prepare a report showing the company's activity variances for September. Indicate in each case whether the variance is favorable (F) or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values and enter any losses with a minus sign.) Varcoe Corporation Activity Variances For the Month Ended September 30 Customers served Revenue Expenses: Wages and salaries Supplies Insurance Miscellaneous expense Total expense Net operating income (loss) Flexible Budget Planning Budget Activity Variances 35.000 40,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:Varcoe Corporation bases its budgets on the activity measure customers served. During September, the company planned to serve
40,000 customers, but actually served 35,000 customers. Revenue is $4.00 per customer served. Wages and salaries are $36,100 per
month plus $1.40 per customer served. Supplies are $0.70 per customer served. Insurance is $10,300 per month. Miscellaneous
expenses are $8,400 per month plus $0.40 per customer served.
Required:
Prepare a report showing the company's activity variances for September. Indicate in each case whether the variance is favorable (F)
or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect
(l.e., zero variance). Input all amounts as positive values and enter any losses with a minus sign.)
Customers served
Revenue
Expenses:
Wages and salaries
Supplies
Insurance
Miscellaneous expense
Total expense
Net operating income (loss)
Varcoe Corporation
Activity Variances
For the Month Ended September 30
Flexible
Budget
Planning
Budget
Activity Variances
35.000
40.000
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