19) Branner Corporation uses customers served as its measure of activity. During

Question

19) Branner Corporation uses customers served as its measure of activity. During June the company budgeted for 26,000 customers, but actually served 23,000 customers The company bases its budgets on the following information: Revenue should be $2.80 per customer served. Wages and salaries should be $22,100 per month plus $0.70 per customer served. Supplies should be $0.50 per customer served. Insurance should be $5,200 per month. Miscellaneous expenses should be $2,100 per month plus $0.30 per customer served. The company reported the following actual results for June: Revenue Wages and salaries Supplies Insurance Miscellaneous expense $63,800 $37,100 $9,900 $5,400 $6,200 Prepare a report showing the company's revenue and spending variances for June

Explanation / Answer

Actual results Revenue and spending variances Flexible budget Actual customers served 23000 23000 Revenue 63800 600 Unfavorable 64400 Expenses: Wages and salaries 37100 1100 Favorable 38200 Supplies 9900 1600 Favorable 11500 Insurance 5400 200 Unfavorable 5200 Miscellaneous expense 6200 2800 Favorable 9000 Total expenses 58600 5300 Favorable 63900 Net operating income 5200 4700 Favorable 500

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