Mieras Corporation uses customers served as its measure of activity. During January, the company budgeted for 37,000 customers, but actually served 36,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:
Revenue: $2.80q
Wages and salaries: $22,800 + $0.90q
Supplies: $0.50q
Insurance: $7,500
Miscellaneous: $3,800 + $0.30q
The company reported the following actual results for January:
Required:
Prepare a report showing the company's revenue and spending variances for January. Label each variance as favorable (F) or unfavorable (U).

Question

Mieras Corporation uses customers served as its measure of activity. During January, the company budgeted for 37,000 customers, but actually served 36,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:
Revenue: $2.80q
Wages and salaries: $22,800 + $0.90q
Supplies: $0.50q
Insurance: $7,500
Miscellaneous: $3,800 + $0.30q
The company reported the following actual results for January:  
Required:
Prepare a report showing the company's revenue and spending variances for January. Label each variance as favorable (F) or unfavorable (U).

Quizplus · Accepted Answer

The Answer of Mieras Corporation uses customers served as its measure of activity. During January, the company budgeted for 37,000 customers, but actually served 36,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:
Revenue: $2.80q
Wages and salaries: $22,800 + $0.90q
Supplies: $0.50q
Insurance: $7,500
Miscellaneous: $3,800 + $0.30q
The company reported the following actual results for January:  
Required:
Prepare a report showing the company's revenue and spending variances for January. Label each variance as favorable (F) or unfavorable (U).

Mieras Corporation Uses Customers Served as Its Measure of Activity