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Adger Corporation is a service company that measures its output based on the number of customers...

Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Fixed Element per Month Variable Element per Customer Served Actual Total for May Revenue $ 6,200 $ 196,000 Employee salaries and wages $ 69,000 $ 1,600 $ 122,900 Travel expenses $ 610 $ 17,700 Other expenses $ 48,000 $ 45,200 When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers. Foundational 9-5 5. What net operating income would appear in Adger’s flexible budget for May?

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Adger Corporation

Statement of Master/Planning Budget, Flexible Budget (at Standard Cost) based on Actual Result and Actual Results for the month of May

Particulars

Flexible Budget (at Standard Cost)

Per Unit

(Based on actual result 35 Customer served per month)

A.

Revenue

$6200

$217,000

B.

Employee Salaries and Wages (Fixed)

$69,000

C.

Employee Salaries and Wages (Variable)

$1600

$56000

D.

Total Employee Salaries and Wages

125000

E.

Travel Expenses

$610

$21,350

F.

Other Expenses

$48,000

G.

TOTAL COST (D+E+F)

$194350

H.

Net operating income in flexible budget (A - G)

22650

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