Domin Corporation bases its budgets on the activity measure customers served. During April, the company planned to serve 31,000 customers, but actually served 35,000 customers. Revenue is $4.80 per customer served. Wages and salaries are $33,000 per month plus $1.60 per customer served. Supplies are $1.00 per customer served. Insurance is $12,200 per month. Miscellaneous expenses are $7,400 per month plus $0.20 per customer served.

1.        Domin Corporation bases its budgets on the activity measure customers served. During April, the company planned to serve 31,000 customers, but actually served 35,000 customers. Revenue is $4.80 per customer served. Wages and salaries are $33,000 per month plus $1.60 per customer served. Supplies are $1.00 per customer served. Insurance is $12,200 per month. Miscellaneous expenses are $7,400 per month plus $0.20 per customer served.

Required:

Prepare a report showing the company's activity variances for April. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

Answer:

Domin Corporations
for the month ended 31 April
	Revenue/Cost Formula	Planning Budget			Flexible Budget			Variance
Number of customers served		31,000			35,000
Revenue	$4.8Q	148,800			168,000			19,200	F
Expenses:
Wages and Salaries	$33,000 + $1.6Q	82,600			89,000			6,400	U
Supplies	$1Q	31,000			35,000			4,000	U
Insurance	12,200	12,200			12,200			-	F
Miscellaneous	$7,400 + $0.2Q	13,600			14,400			800	U
Total Expenses		139,400			150,600			11,200	U
Net Operating Income		9,400			17,400			8,000	F