Adger Corporation is a service company that measures its output based on the num

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:

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.

6. What is Adger’s revenue variance for May?

What is Adger’s employee salaries and wages spending variance for May?

8. What is Adger’s travel expenses spending variance for May?

9. What is Adger’s other expenses spending variance for May?

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

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

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

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

14. What activity variance would Adger report in May with respect to its revenue?

15. What activity variances would Adger report with respect to each of its expenses for May?

Fixed Element
per Month Variable Element per Customer Served Actual Total
for May Revenue $ 6,600 $ 213,500 Employee salaries and wages $ 62,000 $ 2,300 $ 141,100 Travel expenses $ 540 $ 15,700 Other expenses $ 41,000 $ 38,900

Explanation / Answer

6) Revenue variance = (35*6600-213500) = 17500 U

7) Employee salaries and wages spending variance = (35*2300+62000)-141100 = 1400 F

8) Travel expense spending variance = (35*540-15700) = 3200 F

9) Other expense spending variance = 41000-38900 = 2100 F

Note : please post next four question individually for answer

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