Ocean Corporation Uses Customers Served as Its Measure of Activity

Essay

Ocean Corporation uses customers served as its measure of activity. During June, the company budgeted for 21,000 customers, but actually served 19,000 customers. The company bases its budgets on the following information: Revenue should be $5.00 per customer served. Wages and salaries should be $24,900 per month plus $1.80 per customer served. Supplies should be $0.90 per customer served. Insurance should be $6,500 per month. Miscellaneous expenses should be $3,500 per month plus $0.40 per customer served. The company reported the following actual results for June:
Required:
Prepare the company's flexible budget performance report for June. Label each variance as favorable (F) or unfavorable (U).