Question

Cicchetti 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 December:

Cicchetti Corporation Comparison of Actual Results to Planning Budget For the Month Ended December 31
	Actual Results			Planning Budget			Variances
Customers served		38,000			34,000
Revenue ($4.6q)	$	175,100		$	156,400		$	18,700		F
Expenses:
Wages and salaries ($36,100 + $1.4q)		91,400			83,700			7,700		U
Supplies ($0.7q)		26,000			23,800			2,200		U
Insurance ($13,100)		13,400			13,100			300		U
Miscellaneous expense ($6,100 + $0.4q)		22,550			19,700			2,850		U
Total expense		153,350			140,300			13,050		U
Net operating income	$	21,750		$	16,100		$	5,650		F

Required:

Prepare the company's flexible budget performance report for December. Select each variance as favorable (F), unfavorable (U) or "None".

	Cicchetti Corporation Flexible Budget Performance Report Part 1 For the Month Ended December 31 Actual Results Revenue and Spending Variances Flexible Budget Customers served Expenses: Total expenses 0 0 0 Net operating income

	Cicchetti Corporation Flexible Budget Performance Report Part 2 For the Month Ended December 31 Flexible Budget Activity Variances Planning Budget Customers served Expenses: Total expenses 0 0 0 Net operating income

Answer 1

Cicchetti Corporation
Flexible Budget Performance Report Part 1
For the Month Ended December 31
	Actual Results	Revenue and Spending Variances		Flexible Budget
Customers served	38000			38000
Revenue(4.6q)	175100	300	F	174800
Expenses:
Wages and salaries ($36,100 + $1.4q)	91400	2100	U	89300
Supplies ($0.7q)	26000	600	F	26600
Insurance ($13,100)	13400	300	U	13100
Miscellaneous expense ($6,100 + $0.4q)	22550	1250	U	21300
Total expenses	153350	3050	U	150300
Net operating income	21750	2750	U	24500
Cicchetti Corporation
Flexible Budget Performance Report Part 2
For the Month Ended December 31
	Flexible Budget	Activity Variances		Planning Budget
Customers served	38000			34000
	174800	18400	F	156400
Expenses:
Wages and salaries ($36,100 + $1.4q)	89300	5600	U	83700
Supplies ($0.7q)	26600	2800	U	23800
Insurance ($13,100)	13100	0	None	13100
Miscellaneous expense ($6,100 + $0.4q)	21300	1600	U	19700
Total expenses	150300	10000	U	140300
Net operating income	24500	8400	F	16100