Question

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 per Customer per Month Total for May $ 217,000 $128,100 $35,300 $ 34,400 Served Revenue $5,800 $1,800 Employee salaries and wages Travel expenses Other expenses $57,000 950 $ 36,000 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.

Answer 1

Solution 11:

Amount of employee salaries and wages included in planning budget = $57,000 + (35*$1,800) = $120,000

solution 12:

Amount of travel expense included in planning budget = 35*$950 = $33,250

Solution 13:

Amount of other expense included in planning budget = $36,000

Solution 14:

Activity variance of revenue = Budgeted revenue for actual activity - Budgeted revenue for budgeted activity

= (40*$5,800) - (35*$5,800) = $29,000 F

Solution 15:

Activity variance for expense = (Budgeted activity - Actual activity) * Variable amount per unit

Employee salaries and wages = (35-40) * 1800 = $9,000 U

Travel expense = (35 - 40) * $950 = $4,750 U

Other expense (35-40)* 0 = 0 None