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Annie's Homemade Ice Cream is preparing a planning budget for August. Its budgeted revenue per serving is $5.00. It has identified two cost drivers-number of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee labor-hours in August. Data concerning the company's cost formulas are shown below: Ingredients expense Salaries and wages expense Franchise fee Credit card processing fees Utilities expense Rent expense Equipment depreciation expense Other expenses Actual number of servings tual number of labor-hours Revenue Fixed Cost Per Month $ 7,000 Expenses: Cost of ingredients Salaries and wages $ 300 $ 3,000 $ 1,750 $ 4,200 Cost per Serving $ 1.25 $ 0.25 $ 0.09 $ 0.02 In August, the company actually sold 11,200 servings of ice cream and staffed 780 employee labor-hours. It's budgeted revenue per serving is $5.00. Assume Annie's Homemade's actual results for August were as follows: 11,200 788 $57,500 Cost per Labor-Hour $ 8.00 18,100 13,340

Annie's Homemade Ice Cream is preparing a planning budget for August. Its budgeted revenue per serving is $5.00. It has identified two cost drivers-number of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee labor-hours in August. Data concerning the company's cost formulas are shown below: Ingredients expense Salaries and wages expense Franchise fee Credit card processing fees Utilities expense Rent expense Equipment depreciation expense Other expenses Actual number of servings tual number of labor-hours Revenue Fixed Cost Per Month $ 7,000 Expenses: Cost of ingredients Salaries and wages $ 300 $ 3,000 $ 1,750 $ 4,200 Cost per Serving $ 1.25 $ 0.25 $ 0.09 $ 0.02 In August, the company actually sold 11,200 servings of ice cream and staffed 780 employee labor-hours. It's budgeted revenue per serving is $5.00. Assume Annie's Homemade's actual results for August were as follows: 11,200 788 $57,500 Cost per Labor-Hour $ 8.00 18,100 13,340

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 20BEA: Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and...
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Required information Annie's Homemade Ice Cream is preparing a planning budget for August. Its budgeted revenue per serving is $5.00. It has identified two cost drivers-number of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee labor-hours in August. Data concerning the company's cost formulas are shown below: Ingredients expense Salaries and wages expense Franchise fee Credit card processing fees Utilities expense Rent expense Equipment depreciation expense Other expenses Actual number of servings Actual number of labor-hours Revenue Expenses: Cost of ingredients Salaries and wages Franchise fee In August, the company actually sold 11,200 servings of ice cream and staffed 780 employee labor-hours. It's budgeted revenue per serving is $5.00. Assume Annie's Homemade's actual results for August were as follows: Credit card processing fees Utilities Rent and CAM Equipment depreciation Other expenses Total expenses Net operating income Servings Labor-hours Revenue Expenses: Ingredients expense Salaries and wages expense Franchise fee Fixed Cost Cost per Per Month Serving $ 1.25 $ 7,000 Credit card processing fees Utilities expense Rent expense $ 300 $ 3,000 $ 1,750 $ 4,200 Equipment depreciation expense Other expenses Total expense Net operating income $ 0.25 $ 0.09 $ 0.02 Required: Calculate the revenue and spending variances for August. 11,200 788 $ 57,500 Note: Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (I.e., zero varlance). Input all amounts as positive values. Actual Results 18,100 13,340 2,800 1,232 784 3,000 1,750 4,100 45,026 $ 12,474 Cost per Labor-Hour $ 8.00 Flexible Budget Variances
Transcribed Image Text:Required information Annie's Homemade Ice Cream is preparing a planning budget for August. Its budgeted revenue per serving is $5.00. It has identified two cost drivers-number of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee labor-hours in August. Data concerning the company's cost formulas are shown below: Ingredients expense Salaries and wages expense Franchise fee Credit card processing fees Utilities expense Rent expense Equipment depreciation expense Other expenses Actual number of servings Actual number of labor-hours Revenue Expenses: Cost of ingredients Salaries and wages Franchise fee In August, the company actually sold 11,200 servings of ice cream and staffed 780 employee labor-hours. It's budgeted revenue per serving is $5.00. Assume Annie's Homemade's actual results for August were as follows: Credit card processing fees Utilities Rent and CAM Equipment depreciation Other expenses Total expenses Net operating income Servings Labor-hours Revenue Expenses: Ingredients expense Salaries and wages expense Franchise fee Fixed Cost Cost per Per Month Serving $ 1.25 $ 7,000 Credit card processing fees Utilities expense Rent expense $ 300 $ 3,000 $ 1,750 $ 4,200 Equipment depreciation expense Other expenses Total expense Net operating income $ 0.25 $ 0.09 $ 0.02 Required: Calculate the revenue and spending variances for August. 11,200 788 $ 57,500 Note: Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (I.e., zero varlance). Input all amounts as positive values. Actual Results 18,100 13,340 2,800 1,232 784 3,000 1,750 4,100 45,026 $ 12,474 Cost per Labor-Hour $ 8.00 Flexible Budget Variances
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Annie’s Homemade Ice Cream is preparing a planning budget for August. Its budgeted revenue per serving is $5.00. It has identified two cost drivers—number of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee labor-hours in August. Data concerning the company’s cost formulas are shown below: Fixed Cost Per MonthCost per ServingCost per Labor-HourIngredients expense $ 1.25 Salaries and wages expense$ 7,000 $ 8.00Franchise fee $ 0.25 Credit card processing fees $ 0.09 Utilities expense$ 300$ 0.02 Rent expense$ 3,000 Equipment depreciation expense$ 1,750 Other expenses$ 4,200 In August, the company actually sold 11,200 servings of ice cream and staffed 780 employee labor-hours. It’s budgeted 

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