Korsak Corporation Is a Service Company That Measures Its Output

question 253

Multiple Choice

Korsak 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. The planning budget for October was based on serving 23 customers, but a total of 19 customers were actually served during October.The activity variance for "Employee salaries and wages" for October would have been closest to:

• A) $4,800 U
• B) $4,800 F
• C) $4,400 U
• D) $4,400 F

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Definitions:

Cash Outflow

The movement of money out of a business, project, or investment, usually in the form of expenses, purchases, or cash distributions.

Cash Flow Ratio

A metric that assesses the liquidity of a company by comparing its operating cash flow to its current liabilities.

Total Assets

The sum of all resources owned by an entity that are expected to provide future economic benefits.