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).

---

Definitions:

Respondent Behavior

A behavioral response to stimuli that is conditioned through certain environmental or physiological triggers, as detailed in classical conditioning.

Classically Conditioned

The process by which a neutral stimulus becomes associated with an innately meaningful stimulus and acquires the capacity to evoke a similar response.

Observational Learning

Learning that occurs through observing the behavior of others and the outcomes of those behaviors.

Conditioned Response

A learned response to a previously neutral stimulus that becomes conditioned after being associated with an unconditioned stimulus.