Stormy Corporation uses customers served as its measure of activity. The followi

Question

Stormy 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 March Stormy Corporation Actual vs. Planning Budget For the Month Ended March 31 Actual Results Planning Budget Customers served (q) 30,000 28,000 $ 175,000 S 140,000 35,000 F Revenue (S5.00q) Expenses Wages and salaries (S35,000 + 80,000 19,000 13,500 18,000 130,500 77,000 21,000 13,000 20,500 131,500 8,500 3,000 U 2,000 F 500 U $1.50q) Supplies (S0.75q) Insurance ($13,000) Miscellaneous expense ($6,500+ $0.50q) Total expenses Net operating income 2,500 F 1,000 F 36,000 F 44,500$ Required Prepare the company's flexible budget performance report for December. Label each variance as favorable (F) or unfavorable (U) Complete the attached schedule

Explanation / Answer

Stormy Corporation

Actual Vs. Flexible Budget

For the month ended March 31

Actual results Revenue and Spending Variances Variance Indicator Flexible Budget Customers served 30,000 30,000 Revenue 175,000 $ 25,000 F 150,000 Expenses Wages and salaries 80,000 $ 0 N/A 80,000 Supplies 19,000 $ 3,500 F 22,500 Insurance 13,500 500 U 13,000 Miscellaneous expenses 18,000 $ 3,500 F 21,500 Total expenses 130,500 6,500 F 137,000 Net operating income $ 44,500 $ 31,500 F $13,000

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