Branner Corporation Uses Customers Served as Its Measure of Activity

question 131

Essay

Branner Corporation uses customers served as its measure of activity. During June, the company budgeted for 26,000 customers, but actually served 23,000 customers. The company bases its budgets on the following information: Revenue should be $2.80 per customer served. Wages and salaries should be $22,100 per month plus $0.70 per customer served. Supplies should be $0.50 per customer served. Insurance should be $5,200 per month. Miscellaneous expenses should be $2,100 per month plus $0.30 per customer served. The company reported the following actual results for June:
Revenue $63,800
Wages and salaries $37,100
Supplies $9,900
Insurance $5,400
Miscellaneous expense $6,200
Required:
Prepare the company's flexible budget performance report for June. Label each variance as favorable (F) or unfavorable (U).

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Definitions:

Tenth Amendment

An amendment to the U.S. Constitution that states powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Antifederalists

Individuals who opposed the ratification of the Constitution in 1787, fearing centralized power and a lack of protections for individual rights.

National Supremacy

The principle that federal law takes precedence over state law in the United States.

Treaties

Formal agreements between two or more sovereign states that are governed by international law.