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:

When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers.
Required
(All computations pertain to the month of May):
1. What amount of revenue would be included in Adger's flexible budget?
2. What amount of employee salaries and wages would be included in Adger's flexible budget?
3. What amount of travel expenses would be included in Adger's flexible budget?
4. What amount of other expenses would be included in Adger's flexible budget?
5. What net operating income would appear in Adger's flexible budget?
6. What is Adger's revenue variance?
7. What is Adger's employee salaries and wages spending variance?
8. What is Adger's travel expenses spending variance?
9. What is Adger's other expenses spending variance?
10. What amount of revenue would be included in Adger's planning budget?
11. What amount of employee salaries and wages would be included in Adger's planning budget?
12. What amount of travel expenses would be included in Adger's planning budget?
13. What amount of other expenses would be included in Adger's planning budget?
14. What activity variance would Adger report with respect to its revenue?
15. What activity variances would Adger report with respect to each of its expenses?

Transcribed Image Text:

Fixed Element per Month Variable Element per Customer Served Actual Total for May $5,000 $1,100 Revenue Employee salaries and wages Travel expenses Other expenses $160,000 $88,000 $19,000 $34,500 $50,000 $600 $36,000