Cicchetti Corporation uses customers served as its measure of activity. The foll
ID: 2431325 • 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 Cicchetti Corporation Comparison of Actual Results to Planning Budget Actual Planning 34,500 For the Month Ended December 31 Results Budget Variances Customers served Revenue ($4.7q) Expenses 39,000 $183,650 $162,150 $21,500F Wages and salaries $36,200 $1.6q) 100,800 91,400 9,400 U 2,950 U 350 U Miscellaneous expense ($6,200 S0.5g) 27.000 23,450 3,550 U 171,900 155,650 16,250 U $11,750 6,500 5,250 F Supplies ($0.8q) Insurance ($13,200) 30,550 27,600 13,550 13,200 Total expense Net operating income 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 Revenue and Actual Spending Budget Flexible Results Variances Customers served Expenses Total expenses Net operating income Cicchetti Corporation Flexible Budget Performance Report Part 2 For the Month Ended December 31 FlexibleActivity Planning Budget Variances Budget Customers served Expenses Total expenses Net operating incomeExplanation / Answer
Cicchetti Corporation Flexible Budget performance report Part 1 For the month ended December 31 Planning Budget Flexible Budget Activity Variance Cusomer served (q) 34,500 39,000 Revenue ($4.70 X q) $ 1,62,150 1,83,300 $ 21,150 F Expenses: Wages and Salaries [$36,200+ ($1.60 X q)] $ 91,400 $ 98,600 $ 7,200 U Supplies ($0.80 X q) $ 27,600 $ 31,200 $ 3,600 U Insurance $13,200 $ 13,200 13200 $ - None Miscellaneous expense [$6,200+ ($0.50 X q)] $ 23,450 25700 $ 2,250 U Total expense $ 1,55,650 $ 1,68,700 $ 13,050 U Net operating income $ 6,500 $ 14,600 $ 8,100 F Cicchetti Corporation Flexible Budget performance report Part 2 For the month ended December 31 Flexible Budget Actual results Spending Variances Cusomer served (q) 39,000 39,000 Revenue ($4.70 X q) 1,83,300 $ 1,83,650 $ 350 F Expenses: Wages and Salaries [$36,200+ ($1.60 X q)] $ 98,600 $ 1,00,800 $ 2,200 U Supplies ($0.80 X q) $ 31,200 $ 30,550 $ 650 F Insurance $13,200 13200 $ 13,550 $ 350 U Miscellaneous expense [$6,200+ ($0.50 X q)] 25700 $ 27,000 $ 1,300 U Total expense $ 1,68,700 $ 1,71,900 $ 3,200 U Net operating income $ 14,600 $ 11,750 $ 2,850 U