Asked by Christopher Flores on Jun 13, 2024
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Sincell Corporation uses customers served as its measure of activity. During April, the company budgeted for 22,000 customers, but actually served 24,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:Revenue: $4.10qWages and salaries: $26,000 + $1.10qSupplies: $0.70qInsurance: $7,100Miscellaneous expense: $3,400 + $0.30qThe company reported the following actual results for April:
Required:Prepare a report showing the company's revenue and spending variances for April. Label each variance as favorable (F) or unfavorable (U).
Customers Served
The number of clients or customers that have been provided with services or goods by a business within a certain timeframe.
Revenue
The aggregate revenue produced from the sales of goods or services central to a company's main business activities.
Spending Variances
An analysis that breaks down the discrepancy between what was budgeted for expenses and what was actually spent, providing insights for financial management.
- Appraise financial discrepancies in budget forecasts compared to actual results, evaluating if they are beneficial or harmful.
- Explore financial performance metrics through flexible budget reports.
- Operationalize cost and revenue formulae to fabricate budget summaries.
Verified Answer
Learning Objectives
- Appraise financial discrepancies in budget forecasts compared to actual results, evaluating if they are beneficial or harmful.
- Explore financial performance metrics through flexible budget reports.
- Operationalize cost and revenue formulae to fabricate budget summaries.
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