Ginnings Corporation Bases Its Budgets on the Activity Measure Customers

Essay

Ginnings Corporation bases its budgets on the activity measure customers served. During May, the company planned to serve 38,000 customers, but actually served 37,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:Revenue: $2.90qWages and salaries: $37,200 + $0.80qSupplies: $0.40qInsurance: $8,900Miscellaneous expense: $6,400 + $0.10qRequired:Prepare a report showing the company's activity variances for May. Indicate in each case whether the variance is favorable (F) or unfavorable (U).