Question

9. Scharfenberg Corporation is an oil well service company that measures its output by the number...

9. Scharfenberg Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for March.

Fixed Element per Month

Variable Element per Well Serviced

Actual Total for March

Revenue.......................................

$5,700

$145,100

Employee salaries and wages........

$50,300

$1,200

$79,300

Servicing materials........................

$500

$12,200

Other expenses.............................

$31,600

$31,400

When the company prepared its planning budget at the beginning of March, it assumed that 23 wells would have been serviced. However, 25 wells were actually serviced during March.

The activity variance for “Other expenses” for March would have been closest to:

A) $0

B) $200 F

C) $2,712 F

D) $200 U

The revenue variance for March would be closest to:

A) $2,640 U

B) $2,640 F

C) $1,224 U

D) $1,224 F

Homework Answers

Answer #1

Answer a.

Flexible Budget for Other Expenses = $31,600
Planning Budget for Other Expenses = $31,600

Activity Variance for Other Expenses = Flexible Budget for Other Expenses - Planning Budget for Other Expenses
Activity Variance for Other Expenses = $31,600 - $31,600
Activity Variance for Other Expenses = $0

Answer b.

Actual Result for Revenue = $145,100

Flexible Budget for Revenue = $5,700 * Actual Number of Wells Served
Flexible Budget for Revenue = $5,700 * 25
Flexible Budget for Revenue = $142,500

Revenue Variance = Actual Result for Revenue - Flexible Budget for Revenue
Revenue Variance = $145,100 - $142,500
Revenue Variance = $2,600 Favorable

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Milot Corporation is an oil well service company that measures its output by the number of...
Milot Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for April. Fixed Element per Month Variable Element per Well Serviced Actual Total for April Revenue $ 3,800 $ 112,900 Employee salaries and wages $ 41,400 $ 900 $ 69,500 Servicing materials $ 500 $ 15,100 Other expenses $...
Schriever Corporation is an oil well service company that measures its output by the number of...
Schriever Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed element per month Variable Element per Well Serviced Revenue $ 4,500 Employee salaries and wages $ 57,200 $ 1,100 Servicing materials $ 600 Other expenses $ 31,000 The planning budget for May was based on 36 wells serviced, but a total of 31 wells...
Lochner Corporation is an oil well service company that measures its output by the number of...
Lochner Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for June. Fixed Element per Month Variable Element per Well Serviced Actual Total for June Revenue $ 5,600 $ 148,000 Employee salaries and wages $ 40,600 $ 1,200 $ 73,700 Servicing materials $ 500 $ 13,600 Other expenses $...
Pickrel Corporation is an oil well service company that measures its output by the number of...
Pickrel Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed Element per Month Variable Element per Well Serviced Revenue $ 5,500 Employee salaries and wages $ 53,700 $ 1,300 Servicing materials $ 600 Other expenses $ 34,400 When the company prepared its planning budget at the beginning of November, it assumed that 27 wells...
16) Biden Corporation is an oil well service company that measures its output by the number...
16) Biden Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed Element per Month Variable Element per Well Serviced Revenue $ 4,700 Employee salaries and wages $ 41,300 $ 1,000 Servicing materials $ 600 Other expenses $ 40,200 When the company prepared its planning budget at the beginning of May, it assumed that 29...
11.) Smith LLC is an oilfield service company that measures its output by the number of...
11.) Smith LLC is an oilfield service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates used for budgeting purposes. Fixed Element per Month Variable Element per Well Serviced Revenue $4,500 Employee salaries and wages $56,400 $900 Servicing materials $700 Other expenses $35,400 When the company prepared its planning budget at the beginning of December, it assumed that 34 wells would have been serviced. However 32 wells...
Malfoy Corporation is a service company that measures its output by the number of customers served....
Malfoy 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. Fixed Element per Month Variable Element per Customer Served Revenue $ 5,500 Employee salaries and wages $ 43,700 $ 1,100 Travel expenses $ 500 Other expenses $ 43,200 The planning budget for October was based on serving 23 customers, but a total of 19 customers were actually...
1) Witten Corporation is a service company that measures its output by the number of customers...
1) Witten 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. Fixed Element per Month Variable Element per Customer Served Revenue $ 6,600 Employee salaries and wages $ 55,100 $ 1,000 Travel expenses $ 600 Other expenses $ 43,100 A total of 27 customers were actually servedduring January. The total expenses in the flexible budget for Januarywould...
Adger Corporation is a service company that measures its output based on the number of customers...
Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Fixed Element per Month Variable Element per Customer Served Actual Total for May Revenue $ 6,200 $ 196,000 Employee salaries and wages $ 69,000 $ 1,600 $ 122,900 Travel expenses $ 610 $ 17,700 Other expenses $ 48,000...
Adger Corporation is a service company that measures its output based on the number of customers...
Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Fixed Element per Month Variable Element per Customer Served Actual Total for May Revenue $ 6,600 $ 213,500 Employee salaries and wages $ 62,000 $ 2,300 $ 141,100 Travel expenses $ 540 $ 15,700 Other expenses $ 41,000...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT