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 Planning Results Budget Variances Customers served Revenue (3.40g) 34,000 33,000 $116,300 $ 112,200 $ 4,100 F Expenses Wages and salaries ($23,300+$1.23q)65,12063,8901,230 U Supplies ($0.63q) Insurance ($5,200) Miscellaneous expense ($4,200$.32q) ,660 14,760 2,100 F 18,690 20,790 2,100 F 5,200 5,200 0 Total expense 101,670 104,640 2,970 F Net operating income $ 14,630 7,560 $ 7,070 F

Explanation / Answer

Actual Revenue and spending variances Flexible budget Customers served 34000 34000 Revenue 116300 700 F 115600 Expenses: Wages and salaries 65120 0 None 65120 Supplies 18690 2730 F 21420 Insurance 5200 0 None 5200 Miscellaneous expense 12660 2420 F 15080 Total expense 101670 5150 F 106820 Net operating income 14630 5850 F 8780

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