Cicchetti Corporation uses customers served as its measure of activity. The foll

Question

Cicchetti Corporation uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of December: Cicchetti Corporation Comparison of Actual Results to Planning Budget For the Month Ended December 31 Actual Results 38,000 Planning Budget 36,000 Variances Customers served Revenue ($4.9q) Expenses $187,200 $176,400 $10,800 F Wages and salaries ($37,500$1.7q) Supplies ($0.6q) Insurance ($14,500) Miscellaneous expense ($7,500$0.4q) 6,900 U 600 U 450 U 2.750 U 10,700 U $ 19,800 19,700 100 F 105,600 22,200 14,950 24,650 167,400 98,700 21,600 14,500 21,900 156,700 Total expense Net operating income Required Prepare the company's flexible budget performance report for December. Select each variance as favorable (F), unfavorable (U) or "None".

Explanation / Answer

Actual results Revenue and spending variances Flexible budget Customers served 38000 38000 Revenue 187200 1000 F 186200 Expenses: Wages and salaries 105600 3500 U 102100 Supplies 22200 600 F 22800 Insurance 14950 450 U 14500 Miscellaneous expense 24650 1950 U 22700 Total expenses 167400 5300 U 162100 Net operating income 19800 4300 U 24100 Flexible budget Revenue and spending variances Planning budget Customers served 38000 36000 Revenue 186200 9800 F 176400 Expenses: Wages and salaries 102100 3400 U 98700 Supplies 22800 1200 U 21600 Insurance 14500 0 None 14500 Miscellaneous expense 22700 800 U 21900 Total expenses 162100 5400 U 156700 Net operating income 24100 4400 F 19700

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