Thorman Corporation Is a Service Company That Measures Its Output

question 345

Essay

Thorman 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 August.
When the company prepared its planning budget at the beginning of August, it assumed that 35 customers would have been served. However, 39 customers were actually served during August.
Required:
Prepare a report showing the company's revenue and spending variances for August. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

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Definitions:

Country A's Currency

The legal tender issued by Country A's central bank or monetary authority, used as a medium of exchange within Country A.

Forward Rate

An agreed-upon price for a financial transaction that will occur at a future date.

Direct Quote

A quotation in the foreign exchange market that expresses the amount of foreign currency required to buy or sell one unit of the domestic currency.

Direct Quote

A report of the exact words used by a speaker or writer, typically enclosed in quotation marks.