Rients Corporation Is a Service Company That Measures Its Output

question 333

Multiple Choice

Rients 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 October. When the company prepared its planning budget at the beginning of October, it assumed that 39 customers would have been served. However, 44 customers were actually served during October.
The variance for net operating income in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for October would have been closest to:

• A) $3,100 U
• B) $13,600 U
• C) $3,100 F
• D) $13,600 F

---

Definitions:

Antitrust Law

Legislation enacted to prevent monopolies, promote competition, and guard against anti-competitive practices in the marketplace.

Market Shares

Describes the portion of a market controlled by a particular company or product, often expressed as a percentage of total sales in that market.

Laissez-faire Antitrust

An approach to antitrust policy that minimizes government intervention in the market, based on the belief that markets should regulate themselves.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, leading to a decrease in the per-unit cost as output increases.