Cicchetti Corporation uses customers served as its measure of activity. The foll
ID: 2341340 • Letter: C
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:
Required:
Prepare the company's flexible budget performance report for December. Select each variance as favorable (F), unfavorable (U) or "None".
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
Explanation / Answer
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