Adger Corporation is a service company that measures its output based on the num
ID: 2460266 • Letter: A
Question
Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below:
Fixed Element
per Month
Variable Element per Customer Served
Actual Total
for May
Revenue
$
6,000
$
195,500
Employee salaries and wages
$
56,000
$
1,700
$
114,700
Travel expenses
$
900
$
28,900
Other expenses
$
35,000
$
33,500
When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers.
7.
What is Adger’s employee salaries and wages spending variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Actual results_______ Spending Variance______________(F,U)______Flexible budget__________
8.
What is Adger’s travel expenses spending variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Actual results_______ Spending Variance______________(F,U)______Flexible budget__________
9.
What is Adger’s other expenses spending variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Actual results_______ Spending Variance______________(F,U)______Flexible budget__________
10. What amount of revenue would be included in Adger’s planning budget for May?
Variable element per customer served________?
Actual Activity______?
Amount in planning budget_______?
11. What amount of employee salaries and wages would be included in Adger’s planning budget for May?
Empoloyee salaries and wages:
Variable element per customer served____________?
Planned activity_________?
Variable portion of the amount________?
Fixed element per month____________?
Amount in planning budget________?
12.
What amount of travel expenses would be included in Adger’s planning budget for May?
Travel expenses:
Variable element per customer served____________?
Planned activity_________?
Amount in planning budget________?
13.
What amount of other expenses would be included in Adger’s planning budget for May?
Amount of ther expenses_______?
14.
What activity variance would Adger report in May with respect to its revenue? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Flexible budget ________ Activity Variance______________(F,U) ______ Planning budget __________
15.
What activity variances would Adger report with respect to each of its expenses? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Flexible budget
Activity Variance
F or U
Planning budget
Employee Salaries and Wages
Travel Expenses
Other Expenses
Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below:
Explanation / Answer
Ans 7 Salaries & Wages Spending Variance Actual Expense- Standard Expense for actual customers 114700-(56000+(1700*35) -800 F Actual Results 114700 Flexible Budget (56000+(1700*35)) 115500 Ans 8 Travel Expense Spending variance Actual Results 28900 Flexible Budget (900*35) 31500 Spending Variance -2600 F Ans 9 Other Expense Spending variance Actual Results 33500 Flexible Budget 35000 Spending Variance -1500 F Ans 10 Variable element per customer served 195500/35 5585.71 Actual Activity 35 Amount in palnning budget 6000*30 180000 ans 11 Empoloyee salaries and wages: Variable element per customer served Actual (114700-56000)/35 1677.143 Variable element per customer served -Budgeted 1700 Planned activit 30 Variable portion of the amount 51000 Fixed element per month 56000 Amount in planning budget 107000 Ans 12 Travel expenses Variable element per customer served Actual 28900/35 825.71 Variable element per customer served -Budgeted 900 Planned activity 30 Amount in Planning Budget 27000 Ans 13 Amount of Expenses in planning Budget 33500 Ans 14 Activity Variance for Revenue Flexible Budget 35*6000 210000 Planning Budget 30*6000 180000 Activity Variance 30000 F Ans 15 Flexible Budget Activity Variance Planning budget Employee Salaries and Wages 115500 8500 107000 Travel Expenses 31500 4500 27000 Other Expenses 35000 1500 33500
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