MANAGERIAL ACCT W/CONNECT >IC<
15th Edition
ISBN: 9781259405303
Author: Garrison
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 9, Problem 5F15
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):
5.What net operating income would appear in Adger’s flexible budget?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
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
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
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
Employee salaries and wages
Travel expenses
$ 42,300
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:
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
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Refer to the information for Speedy Petes above. Assume that this information was used to construct the following formula for monthly delivery cost. TotalDeliveryCost=41,850+(12.00NumberofDeliveries) Required: Assume that 3,000 deliveries are budgeted for the following month of January. Use the total delivery cost formula for the following calculations: 1. Calculate total variable delivery cost for January. 2. Calculate total delivery cost for January.arrow_forwardAdam Corporation manufactures computer tables and has the following budgeted indirect manufacturing cost information for the next year: If Adam uses the step-down (sequential) method, beginning with the Maintenance Department, to allocate support department costs to production departments, the total overhead (rounded to the nearest dollar) for the Machining Department to allocate to its products would be: a. 407,500. b. 422,750. c. 442,053. d. 445,000.arrow_forwardAdger 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: Fixed Elementper Month Variable Element per Customer Served Actual Totalfor May Revenue $ 5,200 $ 170,000 Employee salaries and wages $ 51,000 $ 1,200 $ 92,700 Travel expenses $ 650 $ 20,600 Other expenses $ 30,000 $ 29,000 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. Questions: A. What activity variance would Adger report in May with respect to its revenue? (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.) B. What activity variances would Adger…arrow_forward
- 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: Fixed Element per Month Variable Element per Customer Served Actual Total for May Revenue $5,000 $160,000 Employee salaries and wages $50,000 $1,100 $88,000 Travel expenses $600 $19,000 Other expenses $36,000 $34,500 When preparing its planning budget the company estimated that it would serve 30 customers per month ; however, during May the company actually served 35. What net operating income would appear in Adger's flexible budget for May? What is Adger revenue variance for May? What is Adger's employee salaries and wages spending variance for May? What is Adger's travel expenses spending for May? What is Adger's other expenses spending for May? What amount of revenue would be included in Adger's planning…arrow_forwardAdger 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: Fixed Element per Month Variable Element per Customer Served Actual Total for May Revenue $5,000 $160,000 Employee salaries and wages $50,000 $1,100 $88,000 Travel expenses $600 $19,000 Other expenses $36,000 $34,500 When preparing its planning budget the company estimated that it would serve 30 customers per month ; however, during May the company actually served 35. 1) What amount of emplyee salaries and awages would be included in Adger's planning budget for May? 2) What amount of travel expenses would be included in Adger's planning budget for May? 3) What amount of other expenses would be included in Adger's planning budget for May? 4) What activity variance would Adger report in May with respect to its…arrow_forwardBonavita 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. Variable Fixed Element Element per Customer per Month Served Revenue Employee salaries and wages Travel expenses Other expenses $4,200 $1,200 $ 500 $41,300 $33,000 When the company prepared its planning budget at the beginning of July, it assumed that 33 customers would have been served. The amount shown for net operating income in the planning budget for July would have been closest to: Multiple Choicearrow_forward
- 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 Uarrow_forwardRuozzo 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 July. Fixed Element per Month Variable Element per Customer Served Actual Total for July Revenue $ 4,500 $ 100,000 Employee salaries and wages $ 43,100 $ 900 $ 63,300 Travel expenses $ 500 $ 11,500 Other expenses $ 36,900 $ 37,900 When the company prepared its planning budget at the beginning of July, it assumed that 27 customers would have been served. However, 22 customers were actually served during July. The activity variance for net operating income for July would have been closest to: 16,400 F or U, 15,500 F or U.arrow_forwardPrestridge 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 August. Fixed Element per Month Revenue Variable Element per Customer Served $ 4,100 Actual Total for August $ 120,500 Employee salaries and wages $ 41,500 $ 1,000 $ 71,200 Travel expenses $ 500 $ 14,800 Other expenses $ 38,900 $ 38,400 When the company prepared its planning budget at the beginning of August, it assumed that 31 customers would have been served. However, 29 customers were actually served during August. The spending variance for total expenses for August would have been closest to:arrow_forward
- Prestridge 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 August. Fixed Element per Variable Element per Actual Total Month Customer Served $ 4,100 $ 1,000 $ 500 for August $ 120,500 $ 71,200 $ 14,800 $ 38,400 Revenue Employee salaries and wages Travel expenses $ 41,500 Other expenses $ 38,900 When the company prepared its planning budget at the beginning of August, it assumed that 31 customers would have been served. However, 29 customers were actually served during August. The activity variance for total expenses for August would have been closest to: Multiple Choice $3,000 F $2,500 F $2,500 U $3,000 Uarrow_forwardMcdougald 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 March. Variable Element per Customer Served Fixed Element per Actual Total Month for March Revenue $ 6,500 $ 169,700 Employee salaries and wages 2$ 58,400 $ 1,000 $83,200 Travel expenses $ 700 $ 18,600 Other expenses 2$ 41,500 $ 41,900 When the company prepared its planning budget at the beginning of March, it assumed that 21 customers would have been served. However, 26 customers were actually served during March. The spending variance for "Employee salaries and wages" for March would have been closest to: O A. $1,200 U O B. $3,800 U O C.$3,800 F O D. $1,200 Farrow_forwardAdger 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: Fixed Element per Month Variable Element per Customer Served Actual Total for May Revenue $ 5,600 $ 182,000 Employee salaries and wages $ 55,000 $ 1,600 $ 110,300 Travel expenses $ 850 $ 27,200 Other expenses $ 34,000 $ 32,600 When preparing its planning budget, the company estimated it would serve 30 customers per month; however, during May the company actually served 35 customers. REQUIRED QUESTIONS:) 3. What amount of travel expenses would be included in Adger’s flexible budget for May? 1. What amount of revenue would be included in Adger’s flexible budget for May?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY