Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 35,400 customers, but actually served 31,600 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:

Revenue: $3.90q

Wages and salaries: $33,600 + $1.22q

Supplies: $0.62q

Insurance: $10,800

Miscellaneous expenses: $6,800 + $0.34q

The company reported the following actual results for February:

Revenue	$	127,800
Wages and salaries	$	68,400
Supplies	$	14,800
Insurance	$	10,800
Miscellaneous expense	$	19,700

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 (i.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 Varaiances		Planning Budget
Customers served	31,600			31,600			35,400
Revenue	$127,800	$4,560	F	$123,400		U	$138,060
Expenses:
Wages and salaries	68,400	3,752	U	72,152
Supplies	14,800	4,792	U	19,592
Insurance	10,800		None	10,800		None
Miscellaneous expense	19,700	2,156	F	17,544
Total expense	113,700	6,388	U	120,088
Net operating income	$14,100	$1,828	U	$3,312