TB Problem Qu. 10-287 Cicchetti Corporation uses customers... Cicchetti Corporat
ID: 2599571 • Letter: T
Question
TB Problem Qu. 10-287 Cicchetti Corporation uses customers...
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:
Required:
Prepare the company's flexible budget performance report for December. Select each variance as favorable (F), unfavorable (U) or "None".
Comparison of Actual Results to Planning Budget
For the Month Ended December 31 Actual Results Planning Budget Variances Customers served 38,000 36,000 Revenue ($4.9q) $ 187,200 $ 176,400 $ 10,800 F Expenses: Wages and salaries ($37,500 + $1.7q) 105,600 98,700 6,900 U Supplies ($0.6q) 22,200 21,600 600 U Insurance ($14,500) 14,950 14,500 450 U Miscellaneous expense ($7,500 + $0.4q) 24,650 21,900 2,750 U Total expense 167,400 156,700 10,700 U Net operating income $ 19,800 $ 19,700 $ 100 F
Explanation / Answer
Prepare flexible budget performance report :
3400 U
Actual results revenue and spending variance Flexible budget Activity variance Static budget Customer served 38000 38000 36000 Revenue 187200 1000 F 186200 9800 F 176400 Expenses: Wages and salaries 105600 3500 U 1021003400 U
98700 Supplies 22200 600 F 22800 1200 U 21600 Insurance 14950 450 U 14500 None 14500 Miscellaneous expense 24650 1950 U 22700 800 U 21900 Total expenses 167400 5300 U 162100 5400 U 156700 Net operating income 19800 4300 U 24100 4400 F 19700Related Questions
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