Prestridge Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for August. Fixed Element per Variable Element per Actual Total Month Customer Served for August $ 120,500 $ 71, 200 $ 14,800 $ 38,400 Revenue Employee salaries and wages Travel expenses $ 4,100 $ 1,000 $ 500 $ 41,500 Other expenses $ 38,900 When the company prepared its planning budget at the beginning of August, it assumed that 31 customers would have been served. However, 29 customers were actually served during August. The activity variance for total expenses for August would have been closest to: Multiple Choice $3,000 F $2,500 F $2,500 U $3,000 U
Prestridge Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for August. Fixed Element per Variable Element per Actual Total Month Customer Served for August $ 120,500 $ 71, 200 $ 14,800 $ 38,400 Revenue Employee salaries and wages Travel expenses $ 4,100 $ 1,000 $ 500 $ 41,500 Other expenses $ 38,900 When the company prepared its planning budget at the beginning of August, it assumed that 31 customers would have been served. However, 29 customers were actually served during August. The activity variance for total expenses for August would have been closest to: Multiple Choice $3,000 F $2,500 F $2,500 U $3,000 U
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 34BEA: Performance Report Based on Budgeted and Actual Levels of Production Bowling Company budgeted the...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Prestridge Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable
cost estimates that it uses for budgeting purposes and the actual results of operations for August.
Fixed Element per Variable Element per
Actual Total
Month
Customer Served
$ 4,100
$ 1,000
$ 500
for August
$ 120,500
$ 71,200
$ 14,800
$ 38,400
Revenue
Employee salaries and wages
Travel expenses
$ 41,500
Other expenses
$ 38,900
When the company prepared its planning budget at the beginning of August, it assumed that 31 customers would have been served. However, 29 customers were
actually served during August.
The activity variance for total expenses for August would have been closest to:
Multiple Choice
$3,000 F
$2,500 F
$2,500 U
$3,000 U
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