Smith Corporation Is a Shipping Container Refurbishment Company That Measures

Essay

Smith Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for February.
When the company prepared its planning budget at the beginning of February, it assumed that 31 containers would have been refurbished. However, 26 containers were actually refurbished during February.
Required:
Prepare a report showing the company's revenue and spending variances for February. Indicate in each case whether the variance is favorable (F) or unfavorable (U).