Camcam Corporation Uses Customers Served as Its Measure of Activity

question 215

Essay

Camcam Corporation uses customers served as its measure of activity. During July, the company budgeted for 26,000 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: $4.90q
Wages and salaries: $34,400 + $1.60q
Supplies: $1.00q
Insurance: $8,500
Miscellaneous expense: $5,600 + $0.20q
The company reported the following actual results for July: Required:
Prepare the company's flexible budget performance report for July. Label each variance as favorable (F) or unfavorable (U).

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Definitions:

Variance

A measure of how much values in a dataset differ from the mean of the dataset.

R Value

A statistic that represents the magnitude and direction of a correlation between two variables, often used in linear regression analysis.

Effect Size

A quantitative measure of the strength of a phenomenon or the magnitude of a relationship between variables.

Cohen

Often refers to statistical power analysis methods or effect size measures designed by Jacob Cohen, used in hypothesis testing.