Asked by Jocelyn 30545 Leon on May 06, 2024
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Ocean Corporation uses customers served as its measure of activity. During June, the company budgeted for 21,000 customers, but actually served 19,000 customers. The company bases its budgets on the following information: Revenue should be $5.00 per customer served. Wages and salaries should be $24,900 per month plus $1.80 per customer served. Supplies should be $0.90 per customer served. Insurance should be $6,500 per month. Miscellaneous expenses should be $3,500 per month plus $0.40 per customer served. The company reported the following actual results for June:
Required:Prepare the company's flexible budget performance report for June. Label each variance as favorable (F) or unfavorable (U).
Customers Served
The number of clients or customers that a business has provided its products or services to within a specific timeframe.
Revenue
The total amount of money a business generates from its operations, often from the sales of goods or services before any expenses are subtracted.
Spending Variances
The differences between the budgeted or planned amounts of spending and the actual amounts spent.
- Measure the contrast between budget estimates and real expenditures, deciding if the variances are favorable or not.
- Delve into financial performance by means of flexible budget reports.
- Harness formulas pertaining to costs and revenues for budget report development.
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Learning Objectives
- Measure the contrast between budget estimates and real expenditures, deciding if the variances are favorable or not.
- Delve into financial performance by means of flexible budget reports.
- Harness formulas pertaining to costs and revenues for budget report development.
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