Question

Crovo Corporation uses customers served as its measure of activity. During December, the company budgeted for 58,000 customers, but actually served 60,000 customers. The company has provided the following data concerning the formulas used in its budgeting and its actual results for December:

Data used in budgeting:

	Fixed element per month			Variable element per customer
Revenue				$	3.00
Wages and salaries	$	21,900		$	1.05
Supplies	$	0		$	0.70
Insurance	$	8,900		$	0.00
Miscellaneous	$	4,900		$	0.50

Actual results for December:

Revenue	$	178,300
Wages and salaries	$	84,000
Supplies	$	40,100
Insurance	$	9,900
Miscellaneous	$	40,100

Required:

Complete the report showing the company's revenue and spending variances for December. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Crovo Corporation Revenue and Spending Variances For the Month Ended December 31
Revenue	$	(Click to select)   U   F   None
Expenses:
Wages and salaries		(Click to select)   U   None   F
Supplies		(Click to select)   U   None   F
Insurance		(Click to select)   None   U   F
Miscellaneous		(Click to select)   U   F   None
Total expense		(Click to select)   F   None   U
Net operating income	$	(Click to select)   None   U   F

Required:

Complete the company's flexible budget for May based on the actual level of activity for the month. (Input all amounts as positive values. Omit the "$" sign in your response.)

Hiles Corporation Flexible Budget For the Month Ended May 31
Actual customers served
Revenue	$
Expenses:
Wages and salaries
Supplies
Insurance
Miscellaneous
Total expense
Net operating income	$

Answer 1

	Flexible Budget
	For the Month Ended May 31
Actual customers served	60000
Revenue	180000	=60000*3
Expenses:
Wages and salaries	84900	=21900+(60000*1.05)
Supplies	42000	=60000*0.7
Insurance	8900
Miscellaneous	34900	=4900+(60000*0.5)
Total expense	170700
Net operating income	9300
	Revenue and Spending Variances
	For the Month Ended May 31
Revenue	1700	U
Expenses:
Wages and salaries	900	F
Supplies	1900	F
Insurance	1000	U
Miscellaneous	5200	U
Total expense	3400	U
Net operating income	5100	U