2.

Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 36,500 customers, but actually served 27,500 customers. The company uses the following revenue and cost formulas in its budgeting, where qis the number of customers served: Revenue: $5.00 Wages and salaries: $34,700 + $1.559 Supplies: $0.959 Insurance: $11,900 Miscellaneous expenses: $7,900 + $0.45q The company reported the following actual results for February: Revenue Wages and salaries Supplies Insurance Miscellaneous expense $149,800 $ 69,500 $ 15,900 $ 11,900 $ 25,200 Required: Prepare the company's flexible budget performance report for February. Label each variance as favorable (F) or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (.e., zero variance). Input all amounts as positive values.) Arrasmith Corporation Flexible Budget Performance Report For the Month Ended February 28 Actual Results Revenue and Spending Variances Flexible Budget Activity Variances Planning Budget 27,500 27,500 36,500 Customers served Revenue Expenses: Wages and salaries Supplies Insurance Miscellaneous expense Total expense Net operating income Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 4,300 client-visits, but its actual level of activity was 4,360 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: Fixed Variable element element per per month client-visit - $ 41.20 Revenue Personnel expenses Medical supplies Occupancy expenses Administrative expenses Total expenses $37,200 3,200 8,400 7,200 $56,000 $ 12.40 9.20 3.20 0.50 $25.30 The activity variance for net operating income in July would be closest to