MANAGERIAL ACCT W/CONNECT >IC<
15th Edition
ISBN: 9781259405303
Author: Garrison
Publisher: MCG
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Textbook Question
Chapter 9, Problem 4F15
Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below:
When preparing its planning budget the company estimated that it would serve 30 customers per month: however, during May the company actually served 35 customers.
Required(all computations pertain to the month of May):
4. What amount of other expenses would be included in Adger’s flexible budget?
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Adger Corporation is a service company that measures its output based on the number of customers served. The
company provided the following fixed and variable cost estimates for budgeting purposes and the actual results for May
as shown below:
Revenue
Employee salaries and wages
Travel expenses
Other expenses
Foundational 9-14 (Algo)
Fixed Element
per Month
$ 55,000
$ 34,000
When preparing its planning budget, the company estimated it would serve 30 customers per month; however, during May
the company actually served 35 customers.
Answer is complete but not entirely correct.
5,283,600 F
Activity variance
Variable Element
per Customer
Served
$ 5,600
$ 1,600
$ 850
$
Actual Total for
May
$ 182,000
$ 110,300
14. What activity variance would Adger report in May with respect to its revenue?
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.
$ 27,200
$ 32,600
Korsak 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.
Fixed Element per Variable Element per
Month
Revenue
Employee salaries and wages
$ 43,700
$ 43,200
Travel expenses
Other expenses
Customer Served
$ 5,500
$ 1,100
$ 500
The planning budget for October was based on serving 23 customers, but a total of 19 customers were actually served during October.
The activity variance for net operating income for October would have been closest to:
Multiple Choice
O
О
$15,600 U
о
$12,500 F
$15,600 F
$12,500 U
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.
Fixed Element per Month
Variable Element per Customer Served
Actual Total for October
Revenue
$ 4,100
$ 182,900
Employee salaries and wages
$ 42,300
$ 1,300
$ 98,800
Travel expenses
$ 700
$ 30,500
Other expenses
$ 31,500
$ 31,900
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 “Employee salaries and wages” for October would have been closest to:
Multiple Choice
A. $700 F
B. $5,800 U
C. $700 U
D. $5,800 F
Chapter 9 Solutions
MANAGERIAL ACCT W/CONNECT >IC<
Ch. 9 - Prob. 1QCh. 9 - What is a flexible budget and how does it differ...Ch. 9 - Prob. 3QCh. 9 - Why is it difficult to interpret a difference...Ch. 9 - What is an activity variance and what does it...Ch. 9 - What is a revenue variance and what does it mean?Ch. 9 - 9-7 What is a spending variance and what does it...Ch. 9 - 9-8 What does a flexible budget performance report...Ch. 9 - How does a flexible budget based on two cost...Ch. 9 - 9-10 What assumption is implicitly made about cost...
Ch. 9 - 9-11 What assumption is implicitly made about cost...Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 2F15Ch. 9 - Prob. 3F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 -
L09-1, LO9-2, LO9-3
Adger Corporation is a...Ch. 9 - Prob. 8F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 10F15Ch. 9 - Prob. 11F15Ch. 9 - Prob. 12F15Ch. 9 - Prob. 13F15Ch. 9 - Prob. 14F15Ch. 9 - Prob. 15F15Ch. 9 - Prob. 1ECh. 9 - Prob. 2ECh. 9 -
EXERCISE 9-3 Revenue and Spending Variances...Ch. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - EXERCISE 9-6 Critique a Variance ReportLO9-6 The...Ch. 9 - Prob. 7ECh. 9 - EXERCISE 9-8 Flexible Budgets and Activity...Ch. 9 - Fixed Cost...Ch. 9 - ...Ch. 9 -
EXERCISE 9-11 Flexible Budget L09-1
Refer to the...Ch. 9 - EXERCISE 9-12 Activity Variances LO9-2
Refer to...Ch. 9 - ...Ch. 9 -
EXERCISE 9-14 Prepare a Flexible Budget...Ch. 9 - Prob. 15ECh. 9 -
EXERCISE 9-16 Flexible Budgets and Revenue and...Ch. 9 - EXERCISE 9-17 Flexible Budget Performance Report...Ch. 9 - Prob. 18ECh. 9 - Prob. 19PCh. 9 -
PROBLEM 9-20 Activity and Spending Variances...Ch. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 -
PROBLEM 9-24 Critiquing a Report; Preparing a...Ch. 9 -
PROBLEM 9-25 Critiquing a Variance Report;...Ch. 9 - Prob. 26CCh. 9 - ...Ch. 9 - Prob. 28C
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