Cicchetti Corporation uses customers served as its measure of activity. The foll

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 ResultsBudgetVariances Customers served Revenue (3.60q) 39,000 38,000 $140,500 $136,800 $ 3,700 F Expenses Wages and salaries ($23,800$1.28q) Supplies (S0.68q) Insurance ($5,700) Miscellaneous expense ($4,700 $.37q) 16,160 18,760 73,720 72,440 1,280 U 23,240 25,840 2,600 F 5,700 5,700 2,600 F Total expense 118,820 122,740 3,920 F Net operating income $ 21,680 $ 14,060 $ 7,620 F

Explanation / Answer

Actual Revenue and spending variances Flexible budget Customers served 39000 39000 Revenue 140500 100 F 140400 Expenses: Wages and salaries 73720 0 None 73720 Supplies 23240 3280 F 26520 Insurance 5700 0 None 5700 Miscellaneous expense 16160 2970 F 19130 Total expense 118820 6250 F 125070 Net operating income 21680 6350 F 15330

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