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 (3.60q) 46,000 45,000 $165,300 $ 162,000 $ 3,300 F Expenses Wages and salaries ($24,500 $1.35q) Supplies ($0.75q) Insurance ($6,400) Miscellaneous expense ($5,400+ $.44q) 86,600 85,250 1,350 U 31,950 33,750 ,800 F 6,400 25,200 0 6,400 23,400 1,800 F Total expense 148,350 150,600 2,250 F Net operating income $ 16,950 $ 11,400 $ 5,550 F

Explanation / Answer

Determine revenue and spending variance :

Actual results revenue and spending variance Flexible budget Customers served 46000 46000 Revenue 165300 300 U 165600 Expenses Wages and salaries 86600 None 86600 Supplies 31950 2550 F 34500 Insurance 6400 None 6400 Miscellaneous exp 23400 2240 F 25640 Total expenses 148350 4790 F 153140 Net operating income 16950 4490 F 12640

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