Sincell Corporation Uses Customers Served as Its Measure of Activity

Essay

Sincell Corporation uses customers served as its measure of activity. During April, the company budgeted for 22,000 customers, but actually served 24,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:
Revenue: $4.10q
Wages and salaries: $26,000 + $1.10q
Supplies: $0.70q
Insurance: $7,100
Miscellaneous expense: $3,400 + $0.30q
The company reported the following actual results for April:
Required:
Prepare a report showing the company's revenue and spending variances for April. Label each variance as favorable (F) or unfavorable (U).