Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted...
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Accounting
Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 35,300 customers, but actually served 32,200 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:
Revenue: $3.80q
Wages and salaries: $33,500 + $1.19q
Supplies: $0.59q
Insurance: $10,700
Miscellaneous expenses: $6,700 + $0.33q
The company reported the following actual results for February:
Revenue
$
125,800
Wages and salaries
$
68,300
Supplies
$
14,700
Insurance
$
10,700
Miscellaneous expense
$
19,200
Required:
Prepare the company's flexible budget performance report for February. 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.)
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