Rients Corporation Is a Service Company That Measures Its Output

question 408

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