A) What amount of revenue would be included in Adger’s flexible budget for May?

Question

A) What amount of revenue would be included in Adger’s flexible budget for May?

B) What amount of employee salaries and wages would be included in Adger’s flexible budget for May?

C) What amount of travel expenses would be included in Adger’s flexible budget for May?

D) What amount of other expenses would be included in Adger’s flexible budget for May?

E)  What net operating income would appear in Adger’s flexible budget for May?

F)What is Adger’s revenue 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.)

G) 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.)

H) 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.)

I) 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.)

J) What amount of revenue would be included in Adger’s planning budget for May?

K) What amount of employee salaries and wages would be included in Adger’s planning budget for May?

L) What amount of travel expenses would be included in Adger’s planning budget for May?

M) What amount of other expenses would be included in Adger’s planning budget for May?

N) 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.)

O) What activity variances would Adger report with respect to each of its expenses 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.)

Required informatio [The following information applies to the questions displayed below.] 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 Variable Element Actual per Customer Served $5,300 1,300 $700 Total for May $ 199,500 103,600 $ 25,800 $ 29,900 per Month Revenue Employee salaries and wages 52, 000 Travel expenses Other expenses 31,000 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers

Explanation / Answer

All parts of answer is given in below table.

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Base Flexible Budget Actual Planning Budget Spending Variance Activity Variance Customer Served q 40 40 35 (Actual vs Flexible) U/F/None (Flexible vs Planing) U/F/None Revenue 5300 Per customer 212000 199500 185500 12500 U 26500 F Less Employee Salaries and wages 52000+1300q 104000 103600 97500 400 F 6500 U Less Travel Expense 700q 28000 25800 24500 2200 F 3500 U Less Others 31000 31000 29900 31000 1100 F 0 None Operating Income 49000 40200 32500 8800 U 16500 F

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