Question

In: Accounting

Crovo Corporation uses customers served as its measure of activity. During December, the company budgeted for...

Crovo Corporation uses customers served as its measure of activity. During December, the company budgeted for 39,000 customers, but actually served 41,000 customers. The company has provided the following data concerning the formulas used in its budgeting and its actual results for December:


Data used in budgeting:

Fixed element
per month
Variable element
per customer
  Revenue $ 2.50          
  Wages and salaries $ 20,000         $ 0.86          
  Supplies $ 0         $ 0.51          
  Insurance $ 7,000         $ 0.00          
  Miscellaneous $ 3,000         $ 0.31          


Actual results for December:

  Revenue $ 101,600
  Wages and salaries $ 50,000
  Supplies $ 19,010
  Insurance $ 9,000
  Miscellaneous $ 19,010

Required:

Complete the report showing the company's revenue and spending variances for December. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Crovo Corporation
Revenue and Spending Variances
For the Month Ended December 31
  Revenue $        (Click to select)  F  None  U   
  Expenses:
       Wages and salaries        (Click to select)  F  None  U    
       Supplies        (Click to select)  U  F  None   
       Insurance        (Click to select)  None  U  F   
       Miscellaneous        (Click to select)  None  U  F   
  Total expense        (Click to select)  None  F  U   
  Net operating income $        (Click to select)  U  None  F   

Solutions

Expert Solution

Complete the report showing the company's revenue and spending variances for December. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Crovo Corporation
Revenue and Spending Variances
For the Month Ended December 31
  Revenue $    (41000*2.5-101600) = 900 U
  Expenses:
       Wages and salaries    55260-50000 = 5260 F
       Supplies    20910-19010 = 1900 F
       Insurance    2000 U
       Miscellaneous    15710-19010 = 3300 U
  Total expense    1860 F
  Net operating income $    960 F

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