PROBLEM (10 points) - Branner Corporation uses customers served as its measure o

Question

PROBLEM (10 points) - 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 $63,800

Wages and salaries $37,100

Supplies $9,900

Insurance $5,400

Miscellaneous expense $6,200

Required:

Prepare the company's flexible budget performance report for June. Label each variance as favorable (F) or unfavorable (U).

Explanation / Answer

Company's flexible budget: Particulars Standard Actual Variance Revenue 2.8*23000 64400 63800 600 F Wages and salaries 22100+(0.7*23000) 38200 37100 1100 F Supplies 0.5*23000 11500 9900 1600 F Insurance 5200 5400 -200 U Misccellaneous Expenses 2100+(0.3*23000) 9000 6200 2800 F

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