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 ResultsBudget Variances Customers served Revenue (3.50q) 43,000 42,000 $150,300 $ 147,000 $ 3,300 F Expenses Wages and salaries ($24,200 $1.32q) Supplies ($0.72q) Insurance ($6,100) Miscellaneous expense (S5,100+ $.41q) 20,920 80,960 79,640 1,320 U 28,840 30,240 1,400 F 6,100 6,100 0 22,320 1,400 F Total expense 136,820 138,300 1,480 F Net operating income $ 13,480$ 8,700 $ 4,780 F

Explanation / Answer

Actual Revenue and spending variances Flexible budget Customers served 43000 43000 Revenue 150300 200 U 150500 Expenses: Wages and salaries 80960 0 None 80960 Supplies 28840 2120 F 30960 Insurance 6100 0 None 6100 Miscellaneous expense 20920 1810 F 22730 Total expense 136820 3930 F 140750 Net operating income 13480 3730 F 9750

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