Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below:

Fixed Element per Month

Variable Element per Customer Served

Actual Total for May

Revenue

$

5,700

$

209,500

Employee salaries and wages

$

64,000

$

1,100

$

106,400

Travel expenses

$

560

$

19,000

Other expenses

$

43,000

$

40,700

When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers.

Solved (1-9):

1. What amount of revenue would be included in Adgers flexible budget for May?

Revenue:
Variable element per customer served	$5,700
Actual activity	40
Amount in flexible budget	$228,000

2. What amount of employee salaries and wages would be included in Adgers flexible budget for May?

Employee salaries and wages:
Variable element per customer served	$1,100
Actual activity	40
Variable portion of the amount	$44,000
Fixed element per month	64,000
Amount in flexible budget	$108,000

3.What amount of travel expenses would be included in Adgers flexible budget for May?

Travel expenses:
Variable element per customer served	$560
Actual activity	40
Amount in flexible budget	$22,400

4. What amount of other expenses would be included in Adgers flexible budget for May?

Amount of other expenses

$43,000

5. What net operating income would appear in Adgers flexible budget for May?

Net operating income

$54,600

6. What is Adgers revenue variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Actual Results	Revenue Variance		Flexible Budget
$209,500	$18,500	U	$228,000

7. What is Adgers employee salaries and wages spending variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Actual Results	Spending Variance		Flexible Budget
$106,400	$1,600	F	$108,000

8. What is Adgers travel expenses spending variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Actual Results	Spending Variance		Flexible Budget
$19,000	$3,400	F	$22,400

9. What is Adgers other expenses spending variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Actual Results	Spending Variance		Flexible Budget
$40,700	$2,300	F	$43,000

Need:

10. What amount of revenue would be included in Adgers planning budget for May?

Revenue:
Variable element per customer served
Planned level of activity
Amount in planning budget

11. What amount of employee salaries and wages would be included in Adgers planning budget for May?

Employee salaries and wages:
Variable element per customer served
Planned activity
Variable portion of the amount
Fixed element per month
Amount in planning budget	$0

12. What amount of travel expenses would be included in Adgers planning budget for May?

Travel expenses:
Variable element per customer served
Planned activity
Amount in planning budget

14. What activity variance would Adger report in May with respect to its revenue? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Flexible Budget	Activity Variance		Planning Budget
		F

15. What activity variances would Adger report with respect to each of its expenses? (I just need the activity variance)

	Flexible Budget	Activity Variance		Planning Budget
Employee salaries and wages	$108,000	?	U	$102,500
Travel expenses	$22,400	?	U	$19,600
Other expenses	$43,000	?	None	$43,000