Wyzard Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for February. Revenue Employee salaries and wages Refurbishing materials Other expenses Fixed Element per Month $40,000 $29,700 Variable Element per Container Refurbished $3,800 $1,100 $700 Actual Total for February $123,400 $73,800 $21,800 $ 28,800 When the company prepared its planning budget at the beginning of February, it assumed that 37 containers would have been refurbished. However, 32 containers were actually refurbished during February. The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for February would have been closest to:
Wyzard Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for February. Revenue Employee salaries and wages Refurbishing materials Other expenses Fixed Element per Month $40,000 $29,700 Variable Element per Container Refurbished $3,800 $1,100 $700 Actual Total for February $123,400 $73,800 $21,800 $ 28,800 When the company prepared its planning budget at the beginning of February, it assumed that 37 containers would have been refurbished. However, 32 containers were actually refurbished during February. The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for February would have been closest to:
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:Wyzard Corporation is a shipping container refurbishment company that measures its output by the number
of containers refurbished. The company has provided the following fixed and variable cost estimates that it
uses for budgeting purposes and the actual results of operations for February.
Revenue
Employee salaries and wages
Refurbishing materials
Other expenses
Fixed Element per Month
$40,000
$29,700
Variable Element per Container
Refurbished
$3,800
$1,100
$700
Actual Total for February
$123,400
$73,800
$21,800
$28,800
When the company prepared its planning budget at the beginning of February, it assumed that 37
containers would have been refurbished. However, 32 containers were actually refurbished during February.
The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to
the flexible budget for February would have been closest to:
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