Cotillo Corporation Uses Customers Served as Its Measure of Activity

question 218

Essay

Cotillo Corporation uses customers served as its measure of activity.During December,the company budgeted for 29,000 customers,but actually served 27,000 customers.The company bases its budgets on the following information: Revenue should be $4.40 per customer served.Wages and salaries should be $33,300 per month plus $1.80 per customer served.Supplies should be $0.60 per customer served.Insurance should be $8,900 per month.Miscellaneous expenses should be $4,600 per month plus $0.10 per customer served.The company reported the following actual results for December: Required:
Prepare the company's flexible budget performance report for December.Label each variance as favorable (F) or unfavorable (U).

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Definitions:

Partial Worksheet

A tool in accounting that shows a portion of the ledger accounts for a specific purpose, not a full financial statement.

Adjusted Trial Balance

The adjusted trial balance is a list of all the accounts of a company, showing the balances after adjustments have been made for accruals, prepayments, depreciation, and other accounting adjustments.

Unadjusted Trial Balance

A list of all the general ledger accounts along with their balances at a particular date before any adjustments are made for the end-of-period accounting.

Adjustments Columns

Columns in a worksheet used to record entries for the adjustment of accounts at the end of a period, prior to preparing financial statements.