Question

Magliacane Corporation is a service company that measures is output by the number of customers served. The company has provided the following fixed and variable contentimates the it uses for budgeting purposes Variable Fixed Element per Element per Month Customer Served Revenue $ 4,300 Employee salaries and wages $ 1,200 $ 58,100 Travel expenses $ 700 Other expenses $ 31,900 When the company prepared its planning budget at the beginning of February, it assumed that 39 customers would have been served. However, 35 customers were actually served during February The revenue in the company's flexible budget for February would have been closest to: A) $170,709 B) $167,700 C) $153,200 D) $150,500 2) Picozzi Snow Removal's cost formula for its vehicle operating cost is $2,060 per month plus $306 per snow-day. For the month of January, the company planned for activity of 10 snow- days, but the actual level of activity was 18 snow-days. The actual vehicle operating cost for the month was $7,720. The vehicle operating cost in the planning budget for January would be closest to: A) $6,956 B) $6,862 C) $7,720 D) $7,568 3) Loughry Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is S530 per month plus $114 per job plus $16 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in October to be 25 jobs and 234 meals, but the actual activity was 20 jobs and 233 meals. The actual cost for catering supplies in October was $6,600. The catering supplies in the flexible budget for October would be closest to: A) S6,600 B) $5,699 C) $6,538 D) $7,124

Answer 1

1) Revenue in flexible budget = 35*4300 = 150500

So answer is d) $150500

2) Vehicle cost in planning budget = 2060+(306*16) = 6956

So answer is a) $6956

3) Catering supplies in Flexible budget = 530+(114*20)+(16*233) = 6538

So answer is c) $6538