Fuquay Corporation Uses Customers Served as Its Measure of Activity

question 159

Essay

Fuquay Corporation uses customers served as its measure of activity. The company bases its budgets on the following information: Revenue should be $4.80 per customer served. Wages and salaries should be $26,500 per month plus $1.70 per customer served. Supplies should be $0.90 per customer served. Insurance should be $7,100 per month. Miscellaneous expenses should be $4,700 per month plus $0.20 per customer served.
The company reported the following actual results for May:
Required:
Prepare a report showing the company's revenue and spending variances for May. Label each variance as favorable (F) or unfavorable (U).

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Definitions:

Industrialization

The process by which an economy is transformed from primarily agricultural to one based on the manufacturing of goods. Individual manual labor is often replaced by mechanized mass production.

Glocalization

The simultaneous homogenization of some aspects of life and the strengthening of some localdifferences under the impact ofglobalization

Neoliberal Globalization

A policy that promotes private control of industry, minimal government interference in the running of the economy, the removal of taxes, tariffs, and restrictive regulations that discourage the international buying and selling of goods and services, and the encouragement of foreign investment.

McDonaldization

A form of rationalization. Specifically, it refers to the spread of the principles of fast-food restaurants, such as efficiency, predictability, and calculability, to all spheres of life.