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	 	$ 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 that it would serve 30 customers per month; however, during May the company actually served 35 customers.

What amount of revenue would be included in Adger’s flexible budget for May?

To determine the revenue that would be included in Adger Corporation's flexible budget for May, we need to calculate the total revenue based on the actual number of customers served (35 customers).

### Calculation Steps:

1. **Fixed Revenue Element**: This remains constant regardless of the number of customers served.
   - Fixed Revenue Element = $5,000

2. **Variable Revenue Element**: This is calculated based on the number of customers served multiplied by the variable revenue per customer.
   - Variable Revenue per Customer = $160,000 / 30 customers (original budget)
   - Variable Revenue per Customer = $5,333.33 (approximately)

3. **Calculate Total Revenue for 35 Customers**:
   - Total Revenue = Fixed Revenue + (Variable Revenue per Customer × Actual Customers Served)
   - Total Revenue = $5,000 + ($5,333.33 × 35)
   - Total Revenue = $5,000 + $186,666.67
   - Total Revenue = $191,666.67

Thus, the revenue included in Adger’s flexible budget for May would be approximately **$191,666.67**.

### Summary of Results
- **Fixed Revenue**: $5,000
- **Variable Revenue**: $186,666.67
- **Total Revenue**: $191,666.67

Would you like more details on this calculation or have any questions? Here are some related questions to consider:

1. What are the implications of serving more customers than initially budgeted?
2. How do fixed and variable costs impact profitability?
3. What adjustments might be necessary for future budgeting?
4. How does flexible budgeting help in performance evaluation?
5. What other factors should be considered when analyzing revenue fluctuations?

**Tip**: Always review both fixed and variable elements in budgeting to accurately assess performance against actual results.

What amount of revenue would be included in Adger’s flexible budget for May?

Explore how to calculate the revenue included in Adger Corporation's flexible budget for May, serving 35 customers with a fixed revenue of $5,000 and variable revenue calculated based on actual performance.

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