Vangemert Corporation Uses Customers Served as Its Measure of Activity

question 179

Essay

Vangemert Corporation uses customers served as its measure of activity. During June, the company budgeted for 22,000 customers, but actually served 25,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:
Revenue: $5.30q
Wages and salaries: $35,400 + $1.90q
Supplies: $0.70q
Insurance: $9,600
Miscellaneous expense: $5,000 + $0.10q
The company reported the following actual results for June: Required:
Prepare a report showing the company's revenue and spending variances for June. Label each variance as favorable (F) or unfavorable (U).

Prepare a statement of cash flows using the indirect method and calculate the cash flow on total assets ratio.

Understand the components of operating, investing, and financing sections of the statement of cash flows.

Describe the importance of noncash expenses in the operating section of cash flows and their adjustments.

Identify transactions that affect long-term assets and liabilities, and equity in the context of cash flows.

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Definitions:

Cognitive Purposive Expression

A theory or perspective in psychology that emphasizes the role of mental processes and purposive behavior in understanding and expressing emotions.

Learning Continuum

The concept that learning is a lifelong process that evolves and progresses through different stages and experiences.

Cognitive Theories

Theoretical perspectives that emphasize mental processes such as thinking, memory, perception, and problem-solving as central to understanding behavior.

Rational Social Theories

Theories that assume individuals act based on logical calculations to maximize benefits and minimize costs in social situations.