Question

Manic Corporation uses customers served as its measure of activity. During June, the company budgeted for 20,000 customers, but actually served 19,000 customers. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June:

Data used in budgeting:

	fixed Element per month	Variable Element per customer
revenue		$4.50
wages and Salaries	$23,900	$1.40
Supplies	0	$0.80
Insurance	$5,700	$0.00
Miscellaneous	$5,000	$0.40

Actual results for June:

Revenue	$85,400
wages and salaries	$52,700
supplies	$17,500
Insurance	$5,500
Miscellaneou	$12,200

Required: Prepare the company's flexible budget performance report for June. Label each variance as favorable (F) or unfavorable (U).

Answer 1

Answer:-

Manic Corporation
Flexible Budget Performance Report
For the month ended June
Particulars		Flexible Budget	Actual Results	Variances	Remark
		$	$	$
Revenue	19000 customers served*$4.50 per customer	85500	85400	-100	Unfavourable
Less:- Variable portion expenses
Wages & salaries	19000 customers served*$1.40 per customer	26600	28800	-2200	Unfavourable
Supplies	19000 customers served*$.80 per customer	15200	17500	-2300	Unfavourable
Miscellenous	19000 customers served*$.40 per customer	7600	7200	400	Favourable
Less: Fixed portion Expenses
Wages & salaries		23900	23900	0	No variance
Supplies		0	0	0	No variance
Insurance		5700	5500	200	Favourable
Miscellenous		5000	5000	0	No variance
Income from opreations		1500	-2500	-4000	Unfavourable