Payeur Corporation Uses Customers Served as Its Measure of Activity

question 138

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:

Expected Return

The anticipated profit or loss from an investment over a specified period, considering potential risks.

Economic States

Different conditions of an economy, characterized by various indicators like GDP growth, unemployment rate, inflation, and market trends.

Probability

A measure of the likelihood of a particular event or outcome, expressed as a ratio between 0 and 1.

Expected Return

The projected average return on an investment over a given period.