Question

Rundell Corporation uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of July. Wages and Supplies are purely variable costs while Insurance is all fixed cost. Miscellaneous expense is a mixed cost with $2,500 being the fixed component of the total amount planned.

Rundell Corporation

Comparison of Actual Results to Planning Budget

For the Month Ended July 31

	Actual Results	Planning Budget
Customers Served	4,260	5,000
Revenue	$16,000	$18,000
Expenses:
Wages	$5,450	$6,000
Supplies	$2,640	$2,500
Insurance	$2,700	$2,700
Miscellaneous Expense	$4,350	$4,500
Total Expense	$15,140	$15,700
Net Operating Income	$860	$2,300

Required: Using the Planning budget column and the assumptions above, determine the unit variable costs and the fixed costs needed to build the Flexible Budget then complete the Revenue and Spending Variances and the Activity Variances for each revenue and expense account and the appropriate totals. You may prepare the Flexible Budget amounts on a separate worksheet and submit, but it is not required.Round answers to whole amounts, use commas if necessary and no dollar signs.

Rundell Corporation

Flexible Budget Performance Report - Variances Only

For the Month Ended July 31

	Revenue and Spending Variances	Favorable (F) Unfavorable (U)	Activity Variances	Favorable (F) Unfavorable (U)
Revenue
Expenses:
Wages and Salaries
Supplies
Insurance
Miscellaneous
Total Expense
Net Operating Income

Answer 1