Sincell Corporation Uses Customers Served as Its Measure of Activity

question 370

Essay

Sincell Corporation uses customers served as its measure of activity. During April, the company budgeted for 22,000 customers, but actually served 24,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:Revenue: $4.10qWages and salaries: $26,000 + $1.10qSupplies: $0.70qInsurance: $7,100Miscellaneous expense: $3,400 + $0.30qThe company reported the following actual results for April:
Required:Prepare a report showing the company's revenue and spending variances for April. Label each variance as favorable (F) or unfavorable (U).

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Definitions:

Start-Up Costs

Start-up costs are the initial expenses incurred during the process of establishing a new business or project, including but not limited to equipment, legal fees, marketing, and rent.

Follower Strategy

A business approach where a company decides to follow the innovations, products, or services introduced by competitors rather than lead the market.

Value Chains

The full range of activities that businesses undergo to bring a product or service from conception, through production, delivery to the consumer, and final disposal, adding value at each step.

Market Position

Describes a brand's unique spot in the marketplace, determined by consumers' perceptions of the brand and its competitors.