Arrison Corporation Uses Customers Served as Its Measure of Activity

question 361

Essay

Arrison Corporation uses customers served as its measure of activity. During July, the company budgeted for 34,000 customers, but actually served 33,000 customers. The company has provided the following data concerning the formulas used in its budgeting and its actual results for July:
Data used in budgeting:
Actual results for July:
Required:
Prepare the company's flexible budget performance report for July. Label each variance as favorable (F) or unfavorable (U).

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Definitions:

Worksheet

A paper or electronic document used by accountants to compile and analyze financial data ahead of the preparation of financial statements.

Permanent Accounting Record

A permanent accounting record is a documented history of a company's financial transactions that are kept for long-term reference and compliance purposes.

General Ledger

A comprehensive record of all financial transactions that occur within a company, serving as the primary source for preparing financial statements.

Journal

A detailed record where all financial transactions of a business are initially recorded before being transferred to accounts in the general ledger.