Adger Corporation is a service company that measures its output based on the num served. The company provided the following fixed and variable cost estimates that it u purposes and the actual results for May as shown below: Variable Element Actual Total for May $160,000 $ 88,000 Fixed per Element Customer per Month Served $ 5,000 $ 50,000$ 1,100 Revenue Employee salaries and wages $ 600 Travel expenses Other expenses $ 36,000 $ 19,000 $ 34,500 When preparing its planning budget the company estimated that it would serve 30 cust however, during May the company actually served 35 customers.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Show transcribed image text 15.What activity variances would Adger report with respect to each of its expenses? (Indicate the effect of each variance by selecting F for favorable, U for unfavorable, and None for no effect (i.e., zero variance). Input all amounts as positive values.) [The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers.
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