Question

Cicchetti 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 December:

Cicchetti Corporation Comparison of Actual Results to Planning Budget For the Month Ended December 31
	Actual Results			Planning Budget			Variances
Customers served		42,000			36,000
Revenue ($4.5q)	$	189,500		$	162,000		$	27,500		F
Expenses:
Wages and salaries ($36,500 + $1.6q)		106,200			94,100			12,100		U
Supplies ($0.7q)		28,600			25,200			3,400		U
Insurance ($13,500)		14,000			13,500			500		U
Miscellaneous expense ($6,500 + $0.5q)		28,950			24,500			4,450		U
Total expense		177,750			157,300			20,450		U
Net operating income	$	11,750		$	4,700		$	7,050		F

Required:

Prepare the company's flexible budget performance report for December. Select each variance as favorable (F), unfavorable (U) or "None".

Answer 1