Adger Corporation Is A Service Company That Measures Its Output Based On The Number 938470
Adger Corporation is a service company that measures its outputbased on the number of customers served. The company provided thefollowing fixed and variable cost estimates that it uses forbudgeting purposes and the actual results for May as shownbelow:
Fixed Element
per MonthVariable Element per Customer ServedActual Total
for May Revenue$5,000 $160,000 Employee salaries andwages$50,000 $1,100 $88,000 Travel expenses$600 $19,000 Other expenses$36,000 $34,500
When preparing its planning budget the company estimated that itwould serve 30 customers per month; however, during May the companyactually served 35 customers.
Required:1.What amount of revenuewould be included in AdgerAc€?cs flexible budget for May?
Revenue:________
Variable element per customer served:_______
Actual Activity:________
Amount in flexible budget:_________
2.What amount of employeesalaries and wages would be included in AdgerAc€?cs flexible budget forMay?
Employees salaries and wages:-xxx-
Variable element per customer served:______
Actual Activity:_________
Variable portion of the amount:______
Fixed element per month:________
Amount in flexible budget:________
3.What amount of travelexpenses would be included in AdgerAc€?cs flexible budget forMay?
Travel expenses:-xxx-
Variable element per customer served:______
Actual activity:_______
Amount in flexible budget:_______
4.What amount of otherexpenses would be included in AdgerAc€?cs flexible budget forMay?
Amount of other expenses:_______
5.What net operatingincome would appear in AdgerAc€?cs flexible budget for May?
Net operating income:______