Payeur Corporation Uses Customers Served as Its Measure of Activity

question 413

Essay

Payeur Corporation uses customers served as its measure of activity. The company bases its budgets on the following information: Revenue should be $4.50 per customer served. Wages and salaries should be $38,300 per month plus $1.40 per customer served. Supplies should be $0.80 per customer served. Insurance should be $10,100 per month. Miscellaneous expenses should be $5,400 per month plus $0.40 per customer served.
The company reported the following actual results for December: Required:
Prepare a report showing the company's revenue and spending variances for December. Label each variance as favorable (F) or unfavorable (U).