Question

14. What activity variance would Adger report in May with respect to its revenue? (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.)

Required information [The following information applies to the questions displayed below.] 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 Variable Element Actual Total per Customer per for May Month Served $ 6,100 $ 1,500 600 $ 223,500 $ 126,000 $20,400 $44,300 Revenue Employee salaries and wages Travel expenses $ 68,000 $ Other expenses $ 47,000 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers

15. What activity variances would Adger report with respect to each of its expenses for May? (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

Adger Corporation Actual 14 Activity variance ww.rot. revenue - Actual customeu Lstandard Price per - selling our customer Customer = 40L$6100 - 5587.50 L (given) (Note a) = $20500 unfavourable (a calculation of Actual telling price per unit - = Actual Revenue = $223500 - Actual units sold = $5587.5 per 40 customers custemes mnate - unfavorable since Actual is less than standard pain. Is Activity variante wendet weten enpenses' - 15 Employees satsnis - Actual x variable) + fixed L – Actual and variable enp duantity cost cost cost - 126000 1140 X 1500 + 68000 = 128000 - 126000 200 = 2000 favouable a) Travel expense Actual Cost = 1 Actual x vaciable fixed - customer cost , cost - 11600 x 40) to } - 20400 24000 -२० ५० = $3600 د لطه

le page. enpenses variable enp & Actual customer no. of + fixed) - Actual cost / expenses COM It 41000 l - 44300 = [0x40 ] + 470001 - 44300 42700 faveurdele - All the I less have set the enpense variance au favourable since standard enpense le variable & Actual + fixed Tenp customer) more than Actual which means enpenses been incurred within the limits of standards up.