Blakesley 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.??Fixed Element per MonthVariable Element per Customer Served?Revenue?$4,200?Employee salaries and wages$51,000$1,000?Travel expenses?$500?Other expenses$39,700?When the company prepared its planning budget at the beginning of January, it assumed that 38 customers would have been served. However, 42 customers were actually served during January.Required:Prepare a report showing the company's activity variances for January. Indicate in each case whether the variance is favorable (F) or unfavorable (U).
What will be an ideal response?
| ? | ? | Flexible Budget | Planning Budget | Activity Variances | ? |
| ? | Customers served (q) | 42 | 38 | ? | ? |
| ? | Revenue ($4,200q) | $176,400 | $159,600 | $16,800 | F |
| ? | Expenses: | ? | ? | ? | ? |
| ? | Employee salaries and wages ($51,000 + $1,000q) | 93,000 | 89,000 | 4,000 | U |
| ? | Travel expenses ($500q) | 21,000 | 19,000 | 2,000 | U |
| ? | Other expenses ($39,700) | 39,700 | 39,700 | 0 | ? |
| ? | Total expenses | 153,700 | 147,700 | 6,000 | U |
| ? | Net operating income | $22,700 | $11,900 | $10,800 | F |
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