Tajiri Corporation uses customers served as its measure of activity. The followi
ID: 2463319 • Letter: T
Question
Tajiri 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 May:
Prepare the company's flexible budget performance report for May. Label each variance as favorable (F) or unfavorable (U). (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Tajiri 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 May:
Explanation / Answer
Solution :
Planning Budget
*Activity Variances
***Flexible Budget
**Revenue and Spending Variances
Actual Results
Customers served
44,000
45,000
45,000
Revenue
154,000
3,500
F
157,500
300
U
157,200
Expenses:
Wages and salaries
83,360
1,340
U
84,700
-
NONE
84,700
Supplies
32,560
740
U
33,300
2,440
F
30,860
Insurance
6,300
-
NONE
6,300
-
NONE
6,300
Miscellaneous expense
24,220
430
U
24,650
2,130
F
22,520
Total expense
146,440
2,510
U
148,950
4,570
F
144,380
Net operating income
7,560
990
F
8,550
4,270
F
12,820
***Flexible Budget
Customers served
45000
Revenue (3.50q*45000)
157500
Expenses:
Wages and salaries ($24,400 + $1.34q*45000)
84700
Supplies ($0.74q*45000)
33300
Insurance
6300
Miscellaneous expense ($5,300 + $.43q*45000)
24650
Total expense
148950
Net operating income
8550
*Activity Variances =Flexible Budget - Planning budget
**Revenue and Spending Variances= Flexible budget - actual results
Planning Budget
*Activity Variances
***Flexible Budget
**Revenue and Spending Variances
Actual Results
Customers served
44,000
45,000
45,000
Revenue
154,000
3,500
F
157,500
300
U
157,200
Expenses:
Wages and salaries
83,360
1,340
U
84,700
-
NONE
84,700
Supplies
32,560
740
U
33,300
2,440
F
30,860
Insurance
6,300
-
NONE
6,300
-
NONE
6,300
Miscellaneous expense
24,220
430
U
24,650
2,130
F
22,520
Total expense
146,440
2,510
U
148,950
4,570
F
144,380
Net operating income
7,560
990
F
8,550
4,270
F
12,820
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