Question
18. Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted...
18.
Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 35,700 customers, but actually served 29,800 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 + $1.31q
Supplies: $0.71q
Insurance: $11,100
Miscellaneous expenses: $7,100 + $0.37q
The company reported the following actual results for February:
| Revenue | $ | 133,800 | |||||||
| Wages and salaries | $ | 68,700 | |||||||
| Supplies | $ | 15,100 | |||||||
| Insurance | $ | 11,100 | |||||||
| Miscellaneous expense | $ | 21,200 | |||||||
Required:
Prepare the company's flexible budget performance report for February. Label each variance as favorable (F) or unfavorable (U).
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