The following information applies to the questions displayed

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 varlable cost estimates that t uses for budgeting purposes and the actual results for May as show below e Element Fixed Eloment por Cuatomer Served Actual Total per Monh $68,000 $47.000 for May 5 223.500 S 126,000 S 20.400 Employoo solerio Trovel expenses Other expenses S 1500 S 600 and wegos 44300 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers.

Solution

PART 1 Revenue: Variable element $      6,100.00 Actual Activity $            40.00 Amount in flexible budget $ 244,000.00 PART 2 Salaries: Variable element $      1,500.00 Actual activity $            40.00 Variable portion $    60,000.00 Fixed element per month $    68,000.00 Amount in flexible budget $ 128,000.00 PART 3 Travel Expenses: Variable Element $          600.00 Actual activity $            40.00 Amount in flexible budget $    24,000.00 PART 4 Other expenses $    47,000.00 PART 5 Net Profit $    45,000.00