Required: Using Exhibit 9–9 as your guide, prepare the company’s flexible budget for July. The Terminator Inc. provides on-site residential pest extermination services. The company has several mobile teams who are dispatched from a central location in company-owned trucks. The EXERCISE 9-6 Critique a Variance Report LO9-6 company uses the number of jobs to measure activity. At the beginning of April, the compe budgeted for 100 jobs, but the actual number of jobs turned out to be 105. A report comparing budgeted revenues and costs to the actual revenues and costs appears below: The Terminator Inc. Variance Report For the Month Ended April 30 Planning Budget Actual Results Variances 105 100 Jobs ... .. Revenue .... $20,520 $19,500 $ 1,020 F Expenses: Mobile team operating costs . Exterminating supplies Advertising Dispatching costs .. Office rent .. 320 U 10,000 1,800 10,320 960 840 F 800 800 .. 2,340 140 U 1,800 2,100 2,200 1,800 2,100 Insurance. 0. Total expense ... 18,320 18,700 380 F .. Net operating income ... $ 2,200 %24 800 $ 1,400 F Required: Is the above variance report useful for evaluating how well revenues and costs were controllea during April? Why, or why not?
Required: Using Exhibit 9–9 as your guide, prepare the company’s flexible budget for July. The Terminator Inc. provides on-site residential pest extermination services. The company has several mobile teams who are dispatched from a central location in company-owned trucks. The EXERCISE 9-6 Critique a Variance Report LO9-6 company uses the number of jobs to measure activity. At the beginning of April, the compe budgeted for 100 jobs, but the actual number of jobs turned out to be 105. A report comparing budgeted revenues and costs to the actual revenues and costs appears below: The Terminator Inc. Variance Report For the Month Ended April 30 Planning Budget Actual Results Variances 105 100 Jobs ... .. Revenue .... $20,520 $19,500 $ 1,020 F Expenses: Mobile team operating costs . Exterminating supplies Advertising Dispatching costs .. Office rent .. 320 U 10,000 1,800 10,320 960 840 F 800 800 .. 2,340 140 U 1,800 2,100 2,200 1,800 2,100 Insurance. 0. Total expense ... 18,320 18,700 380 F .. Net operating income ... $ 2,200 %24 800 $ 1,400 F Required: Is the above variance report useful for evaluating how well revenues and costs were controllea during April? Why, or why not?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 40P: The controller for Muir Companys Salem plant is analyzing overhead in order to determine appropriate...
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