Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 35,200 customers, but actually served 32,800 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:Revenue: $3.70qWages and salaries: $33,400 + $1.16qSupplies: $0.56qInsurance: $10,600Miscellaneous expenses: $6,600 + $0.32qThe company reported the following actual results for February:
Required:Prepare the company's flexible budget performance report for February. Label each variance as favorable (F) or unfavorable (U).

Question

Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 35,200 customers, but actually served 32,800 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:Revenue: $3.70qWages and salaries: $33,400 + $1.16qSupplies: $0.56qInsurance: $10,600Miscellaneous expenses: $6,600 + $0.32qThe company reported the following actual results for February:
  Required:Prepare the company's flexible budget performance report for February. Label each variance as favorable (F) or unfavorable (U).

Quizplus · Accepted Answer

The Answer of Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 35,200 customers, but actually served 32,800 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:Revenue: $3.70qWages and salaries: $33,400 + $1.16qSupplies: $0.56qInsurance: $10,600Miscellaneous expenses: $6,600 + $0.32qThe company reported the following actual results for February:
  Required:Prepare the company's flexible budget performance report for February. Label each variance as favorable (F) or unfavorable (U).

Arrasmith Corporation Uses Customers Served as Its Measure of Activity