Lineback Corporation Bases Its Budgets on the Activity Measure Customers

question 208

Essay

Lineback Corporation bases its budgets on the activity measure customers served. During April, the company planned to serve 33,000 customers, but actually served 30,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:
Revenue: $2.60q
Wages and salaries: $26,000 + $0.70q
Supplies: $0.50q
Insurance: $5,400
Miscellaneous expense: $2,700 + $0.20q
Required:
Prepare a report showing the company's activity variances for April. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

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Definitions:

Latent Ties

Latent ties refer to potential social connections that are not currently active but can be activated when necessary, representing untapped social resources.

Reputational Capital

The value derived from the positive perception of a business or brand by its customers, stakeholders, and the broader public.

Non-Working Spend

Marketing expenses not directly related to content creation or media buying, such as research, strategy development, and agency fees.

Campaign Assets

The tangible and intangible items that are used to support and promote a campaign, including visuals, content, and digital resources.