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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 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	 	$ 5,000	$ 160,000
Employee salaries and wages	$ 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 it would serve 30 customers per month; however, during May the company actually served 35 customers.

12. What amount of travel expenses would be included in Adger’s planning budget for May?

To calculate the travel expenses included in Adger Corporation's planning budget for May, we need to use the following information:

- The variable element per customer served for travel expenses: **$600**.
- The company estimated it would serve **30 customers** for the planning budget.

The total travel expenses in the planning budget will be based on the variable cost per customer and the estimated number of customers served.

### Planning Budget Calculation for Travel Expenses:

\[
\text{Travel Expenses} = \text{Variable Cost per Customer} \times \text{Estimated Number of Customers}
\]

\[
\text{Travel Expenses} = 600 \times 30 = 18,000
\]

Therefore, the amount of travel expenses included in Adger’s planning budget for May would be **$18,000**.

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Would you like further clarification on this or any additional details?

Here are 5 related questions for further practice:
1. What are the total employee salaries and wages included in the planning budget for May?
2. How would the actual expenses compare to the budgeted expenses for other categories in May?
3. What is the total estimated revenue in the planning budget based on 30 customers?
4. How do fixed costs impact the overall budgeting process in this scenario?
5. What is the impact on profit when the actual number of customers differs from the estimate?

**Tip:** Understanding the difference between fixed and variable costs is crucial for accurate budget planning and variance analysis.

What amount of travel expenses would be included in Adger’s planning budget for May?

Find out how to calculate travel expenses for Adger Corporation's planning budget for May, using the variable cost of $600 per customer and the estimate of 30 customers served. This problem involves budget planning concepts and cost analysis, suitable for business accounting students.

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