16) Gearhart Co During Septem serv rporation bases its budgets on the activity m

Question

16) Gearhart Co During Septem serv rporation bases its budgets on the activity measure customers served ber, the company planned to serve 25,000 customers, but actually ed 29,000 customers. The company has provided the following data concerning the formulas it uses in its budgeting: Fixed element per month Variable element per Revenue Wages and salaries Supplies nsurance Miscellaneous expense $23,700 $0 $5,300 $3,200 customer $3.10 $0.80 $0.60 $0.00 $0.20 Prepare the company's flexible budget for September

Explanation / Answer

FLEXIBLE BUDGET FOR THE 29000 CUSTOMERS PARTICULARS No. of units Variable Cost per unit Total Cost Revenue                29,000 $3.10 $89,900.00 Less: Variable Expenses Wages and salaries                29,000 $0.80 $23,200 Supplies                29,000 $0.60 $17,400 Miscllaneous Expenses                29,000 $0.20 $5,800 Total Variable Expesnes $46,400 Less: Fixed Expenses Wages and salaries $23,700 Insurance $5,300 Miscallaneous Expenses $3,200 Total Fixed Cost $32,200 Net Revenue $11,300

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