Mcdougald Corporation Is a Service Company That Measures Its Output

question 345

Multiple Choice

Mcdougald 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 March. When the company prepared its planning budget at the beginning of March, it assumed that 21 customers would have been served. However, 26 customers were actually served during March.
The spending variance for "Employee salaries and wages" for March would have been closest to:

• A) $1,200 F
• B) $3,800 F
• C) $3,800 U
• D) $1,200 U

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Definitions:

Factual Information

Information based on real, objective facts or data, without interpretation or opinion.

Analytical

Relating to or using analysis or logical reasoning.

Progress Report

A document or update that outlines the current status of a project, including what has been completed, what is currently being worked on, and any challenges encountered.

Past Performance

A track record of an individual's or organization's achievements and behavior in previous activities or projects, often used as an indicator of future performance.