Required information The following information applies to th

Required information 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: Fixed Element Variable Element Actual Total per Month per Customer Served for May $ 5,700 $ 209,500 $106,400 Revenue Employee salaries and wages Travel expenses Other expenses $ 64,000 1,100 19,000 $ 40,700 560 $ 43,000 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 14. What activity variance would Adger report in May with respect to its revenue? (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.) Activity variance one

Solution

14. Activity variance for revenue : (Budgeted customer-actual customer)budgeted revenue per customer served

= (35-40)5700

Activity variance for revenue = 28500 F

15. Activity variance for employee salaries and wages = (35*1100+64000)-(40*1100+64000) = 5500 U

Activity variance for Travel expenses = (35*560)-(40*560) = 2800 U

Activity variance for other expenses = (43000-43000) = Nil