Klingshirn Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for December.??Fixed Element per MonthVariable Element per Customer ServedActual Total for December?Revenue?$5,400$126,800?Employee salaries and wages$44,500$1,300$73,400 ?Travel expenses?$600$13,400?Other expenses$41,900?$42,700When the company prepared its planning budget at the beginning of December, it assumed that 25 customers would have been served. However, 23 customers were actually served during December.Required:Prepare a performance report showing the company's activity and revenue and spending variances for
December. Indicate in each case whether the variance is favorable (F) or unfavorable (U).
What will be an ideal response?
| ? | ? | Flexible Budget | Planning Budget |
| ? | Customers served (q) | 23 | 25 |
| ? | Revenue ($5,400q) | $124,200 | $135,000 |
| ? | Expenses: | ? | ? |
| ? | Employee salaries and wages ($44,500 + $1,300q) | 74,400 | 77,000 |
| ? | Travel expenses ($600q) | 13,800 | 15,000 |
| ? | Other expenses ($41,900) | 41,900 | 41,900 |
| ? | Total expenses | 130,100 | 133,900 |
| ? | Net operating income | $(5,900) | $1,100 |
| ? | ? | Actual Results | Revenue and Spending Variances | ? | Flexible Budget | Activity Variances | ? | Planning Budget |
| ? | Customers served | 23 | ? | ? | 23 | ? | ? | 25 |
| ? | Revenue | $126,800 | $2,600 | F | $124,200 | $10,800 | U | $135,000 |
| ? | Expenses: | ? | ? | ? | ? | ? | ? | ? |
| ? | Employee salaries and wages | 73,400 | 1,000 | F | 74,400 | 2,600 | F | 77,000 |
| ? | Travel expenses | 13,400 | 400 | F | 13,800 | 1,200 | F | 15,000 |
| ? | Other expenses | 42,700 | 800 | U | 41,900 | 0 | ? | 41,900 |
| ? | Total expenses | 129,500 | 600 | F | 130,100 | 3,800 | F | 133,900 |
| ? | Net operating income | $(2,700) | $3,200 | F | $(5,900) | $7,000 | U | $1,100 |
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