Shaak Corporation Uses Customers Served as Its Measure of Activity

question 121

Essay

Shaak Corporation uses customers served as its measure of activity.The company bases its budgets on the following information: Revenue should be $3.20 per customer served.Wages and salaries should be $21,000 per month plus $0.80 per customer served.Supplies should be $0.70 per customer served.Insurance should be $5,300 per month.Miscellaneous expenses should be $3,100 per month plus $0.10 per customer served.

The company reported the following actual results for October:
Required:
Prepare a report showing the company's revenue and spending variances for October.Label each variance as favorable (F)or unfavorable (U).

---

Definitions:

Bargaining Power of Buyers

The ability of buyers to negotiate lower prices or better terms with sellers, influenced by factors such as market competition and buyer concentration.

Threat of New Entrants

A term used in industry analysis referring to the possibility and ease with which new competitors can enter the market and impact existing businesses.

Degree of Rivalry

The intensity of competition among entities within the same industry or market.

Sociocultural

Relating to the combination of social and cultural factors that influence behaviors, values, and attitudes in a society.