Cicchetti Corporation uses customers served as its measure of activity. The foll
ID: 2590499 • 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 For the Month Ended December 31 Actual Planning ResultsBudget Variances Customers served Revenue (3.50q) 25,000 24,000 $ 88,000$ 84,000 $ 4,000 F Expenses: Wages and salaries ($22,400 $1.14q) Supplies ($0.54q) nsurance ($4,300) 50,900 49,760 1,140 U 11,660 12,960 ,300 F 4,300 4,300 Miscellaneous expense ($3,300 $.34q) 10,160 11,460 1,300 F Total expense 77,020 78,480 1,460 F Net operating income $ 10,980$ 5,520 $ 5,460 FExplanation / Answer
Actual results Revenue and spending variances Flexible budget Customers served 25000 25000 Revenue 88000 500 F 87500 Expenses: Wages and salaries 50900 0 None 50900 Supplies 11660 1840 F 13500 Insurance 4300 0 None 4300 Miscellaneous expense 10160 1640 F 11800 Total expense 77020 3480 F 80500 Net operating income 10980 3980 F 7000