Solved

Guy Corporation Uses Customers Served as Its Measure of Activity

Question 52

Essay

Guy Corporation uses customers served as its measure of activity.During January,the company budgeted for 32,000 customers,but actually served 35,000 customers.The company uses the following revenue and cost formulas in its budgeting,where q is the number of customers served:
Revenue: $4.20q
Wages and salaries: $33,900 + $1.40q
Supplies: $0.60q
Insurance: $10,000
Miscellaneous: $7,000 + $0.40q
The company reported the following actual results for January: Guy Corporation uses customers served as its measure of activity.During January,the company budgeted for 32,000 customers,but actually served 35,000 customers.The company uses the following revenue and cost formulas in its budgeting,where q is the number of customers served: Revenue: $4.20q Wages and salaries: $33,900 + $1.40q Supplies: $0.60q Insurance: $10,000 Miscellaneous: $7,000 + $0.40q The company reported the following actual results for January: Required: Prepare the company's flexible budget performance report for January.Label each variance as favorable (F) or unfavorable (U). Required:
Prepare the company's flexible budget performance report for January.Label each variance as favorable (F) or unfavorable (U).

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q10: Smithson Clinic uses client-visits as its measure

Q47: Spraque Air uses two measures of activity,

Q55: Karpin Jeep Tours operates jeep tours in

Q119: Henkel Clinic uses client-visits as its measure

Q122: Moorhouse Clinic uses client-visits as its measure

Q178: Lutts Kennel uses tenant-days as its measure

Q179: Razor Kennel uses tenant-days as its measure

Q210: Dwelmont Hotel bases its budgets on guest-days.

Q224: A problem with directly comparing a static

Q270: Worden Hospital bases its budgets on patient-visits.