Rients Corporation Is a Service Company That Measures Its Output

question 311

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 spending variance for "Other expenses" for October would have been closest to:

• A) $400 F
• B) $3,625 F
• C) $400 U
• D) $3,625 U

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Definitions:

Waiver

A voluntary relinquishment or surrender of some known right or privilege.

Release

A promise not to sue or press a claim, or a discharge of a person from any further responsibility to act.

Neurological Disease

A condition affecting the nervous system, including the brain, spinal cord, and nerves.

Specific Performance

A legal remedy that requires a party to perform a specific act, often the fulfillment of a contract, rather than simply paying damages for failing to fulfill it.