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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	 	$ 5,900	$ 216,500
Employee salaries and wages	$ 66,000	$ 1,300	$ 116,200
Travel expenses	 	$ 580	$ 19,700
Other expenses	$ 45,000	 	$ 42,500
When preparing its planning budget, the company estimated it would serve 35 customers per month; however, during May the company actually served 40 customers.


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



To calculate the revenue for Adger Corporation's **flexible budget** for May, we need to account for both the **fixed** and **variable elements** of revenue based on the actual number of customers served. Here’s how we can do that:

### Given Information:
- **Fixed revenue per month**: \$5,900
- **Variable revenue per customer served**: \$216,500 ÷ 40 customers = \$5,412.50 per customer
- **Actual customers served in May**: 40

### Flexible Budget Revenue Formula:
\[
\text{Flexible Budget Revenue} = (\text{Fixed Revenue}) + (\text{Variable Revenue per Customer} \times \text{Number of Customers})
\]

### Step-by-Step Calculation:
1. **Variable revenue per customer**: We already calculated that the variable revenue is \$5,412.50 per customer.
2. **Revenue from variable component**:  
\[
\text{Variable Revenue} = 5,412.50 \times 40 = 216,500
\]

3. **Add fixed revenue**:  
\[
\text{Total Flexible Budget Revenue} = 5,900 + 216,500 = 222,400
\]

### Answer:
The amount of **revenue** included in Adger’s **flexible budget** for May would be **\$222,400**.

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Would you like further clarification or details on any part of this solution?

### Related Questions:
1. What would the total employee salaries and wages be in the flexible budget for May?
2. How would travel expenses change in the flexible budget based on the number of customers served?
3. What would be the flexible budget amount for other expenses, given the actual customer count?
4. How does the flexible budget help Adger Corporation manage its variable costs effectively?
5. How would you calculate the overall total expenses for the flexible budget in May?

**Tip**: When working with flexible budgets, always adjust variable costs based on the actual level of activity (customers, production, etc.) while keeping fixed costs constant.

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

Discover how to calculate the revenue for Adger Corporation's flexible budget in May, using key concepts like fixed and variable revenue components. This detailed guide walks through the formula and shows how to adjust revenue based on actual customer counts. Ideal for students and professionals in accounting and business.

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