Thorman Corporation Is a Service Company That Measures Its Output

Essay

Thorman Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for August.
When the company prepared its planning budget at the beginning of August, it assumed that 35 customers would have been served. However, 39 customers were actually served during August.
Required:
Prepare a report showing the company's revenue and spending variances for August. Indicate in each case whether the variance is favorable (F) or unfavorable (U).