Question

Bickel Corporation uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of November:

Bickel Corporation
Comparison of Actual Results to Planning Budget
For the Month Ended November 30
	Actual Results			Planning Budget		Variances
Customers served		37,000			36,000
Revenue ($3.50q)	$	129,100		$	126,000	$	3,100	F
Expenses:
Wages and salaries ($23,600 + $1.26q)		70,220			68,960		1,260	U
Supplies ($0.66q)		21,360			23,760		2,400	F
Insurance ($5,500)		5,500			5,500		0	None
Miscellaneous expense ($4,500 + $0.35q)		14,700			17,100		2,400	F
Total expense		111,780			115,320		3,540	F
Net operating income	$	17,320		$	10,680	$	7,640	F

Required:

Prepare the company's flexible budget performance report for November. Label each variance as favorable (F) or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Answer 1

	Actual Results	Revenue and spending variances		Flexible budget	Activity variances		Planning budget
Customers served	37000			37000			36000
Revenue	129100	400	U	129500	3500	F	126000
Expenses:
Wages and salaries	70220	0	None	70220	1260	U	68960
Supplies	21360	3060	F	24420	660	U	23760
Insurance	5500	0	None	5500	0	None	5500
Miscellaneous expense	14700	2750	F	17450	350	U	17100
Total expense	111780	5810	F	117590	2270	U	115320
Net operating income	17320	5410	F	11910	1230	F	10680