Required information [The following information applies to the questions display

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Required information [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 Total for May $ 223,500 $ 126, 000 $ 20,400 44,300 per Month Revenue Employee salaries and wages Travel expenses Other expenses per Customer Served $ 6,100 $ 1,500 $600 68,000 $47,000 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 Required: 1. What amount of revenue would be included in Adger's flexible budget for May? Amount of revenue included in the flexible budget

Explanation / Answer

1) Revenue in flexible budget = 6100*40 = 244000

3) Travel expense in flexible budget = 600*40 = 24000

5) Net operating income in flexible budget = 244000-(24000+60000+68000+47000) = 45000

7) Spending variance of salary and wages = (1500*40+68000)-126000 =2000 F

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