ACCT HW10 Fall17 1. Adger Corporation is a service company that measures its out

Question

ACCT HW10 Fall17 1. 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 Varlable Element per Element Customer Total per Month Served for May Fixed Actual Revenue Employee salares and wages Travel expenses Other expenses $5,500 $204,000 $59,000 $ 2,000 $137,900 $ 510 $17500 $36,200 $38,000 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. What amount of revenue would be included in Adger's flexible budget for May? a. Revenue Variable element per customer served Actual activity Amount in flexible budget b. What amount of employee salaries and wages would be included in Adger's flexible budget for May? Employee salaries and wages Variable element per customer served Actual activity Variable portion of the amount Fixed element per month Amount in flexible budget c. What amount of travel expenses would be included in Adger's flexible budget for May? Travel expenses: Variable element per customer served Actual activity Amount in flexible budget d. What amount of other expenses would be included in Adger's flexible budget for May?

Explanation / Answer

a) Revenue include in flexible budget :

b) Employee salaries and wages in flexible budget

C) Travel expenses in flexible budget

d) Other expenses in flexible budget is 38000

e) Net operating income in flexible budget :

Revenue Variable element per customer served 5500 Actual activity 40 Amount in flexible budget 220000

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