Exam 9: Flexible Budgets and Performance Analysis

Rogstad Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 6,700 units, but its actual level of activity was 6,670 units. The company has provided the following data concerning the formulas to be used in its budgeting: The activity variance for selling and administrative expenses in March would be closest to:

Shaak Corporation uses customers served as its measure of activity. The company bases its budgets on the following information: Revenue should be $3.20 per customer served. Wages and salaries should be $21,000 per month plus $0.80 per customer served. Supplies should be $0.70 per customer served. Insurance should be $5,300 per month. Miscellaneous expenses should be $3,100 per month plus $0.10 per customer served. The company reported the following actual results for October: Required: Prepare a report showing the company's revenue and spending variances for October. Label each variance as favorable (F) or unfavorable (U).

Adamyan Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for May was based on 3,700 meals, but the diner actually served 3,200 meals. The diner's director has provided the following cost data to use in the budget: groceries, $2.10 per meal; kitchen operations, $5,700 per month plus $1.55 per meal; administrative expenses, $3,800 per month plus $0.35 per meal; and fundraising expenses, $1,500 per month. The director has also provided the diner's statement of actual expenses for the month: Required: Prepare a report showing the activity variances for each of the expenses and for total expenses for May.

Leist Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,170 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: The occupancy expenses in the flexible budget for September would be closest to:

Mansour Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for February was based on 3,000 meals, but the diner actually served 3,400 meals. The diner's director has provided the following cost formulas to use in budgets: Required: Prepare the diner's flexible budget for the actual number of meals served in February. The budget will only contain the costs listed above; no revenues will be on the budget.

Pickrel Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. When the company prepared its planning budget at the beginning of November, it assumed that 27 wells would have been serviced. However, 31 wells were actually serviced during November. The amount shown for total expenses in the planning budget for November would have been closest to:

Teel Printing uses two measures of activity, press runs and book set-ups, in the cost formulas in its budgets and performance reports. The cost formula for wages and salaries is $8,850 per month plus $400 per press run plus $950 per book set-up. The company expected its activity in July to be 204 press runs and 111 book set-ups, but the actual activity was 201 press runs and 110 book set-ups. The actual cost for wages and salaries in July was $193,780. The spending variance for wages and salaries in July would be closest to:

Tennies Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,290 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting: Actual results for November: The administrative expenses in the planning budget for November would be closest to:

Manter Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 6,900 units, but its actual level of activity was 6,940 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Actual results for June: The direct materials in the flexible budget for June would be closest to:

Morles Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide. The company uses the following data in its budgeting: In May, the company budgeted for 407 guests and 113 jeeps. The company's income statement showing the actual results for the month appears below: Required: Prepare a flexible budget performance report showing both the company's activity variances and revenue and spending variances for May. Label each variance as favorable (F) or unfavorable (U).

Luckman Corporation bases its budgets on the activity measure customers served. During July, the company plans to serve 32,000 customers. The company has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare the company's planning budget for July.

Ruiz Clinic bases its budgets on the activity measure patient-visits. During July, the clinic planned for an activity level of 3,700 patient-visits, but the activity level was actually 3,600 patient-visits. The clinic has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare the clinic's flexible budget for July based on the actual level of activity for the month.

Wember Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $400 per month plus $82 per job plus $10 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in September to be 20 jobs and 144 meals, but the actual activity was 16 jobs and 141 meals. The actual cost for catering supplies in September was $3,100. The catering supplies in the planning budget for September would be closest to:

Leven Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 3,000 client-visits, but its actual level of activity was 3,050 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for September: The personnel expenses in the planning budget for September would be closest to:

Rients Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for October. When the company prepared its planning budget at the beginning of October, it assumed that 39 customers would have been served. However, 44 customers were actually served during October. The spending variance for "Employee salaries and wages" for October would have been closest to:

Rhed Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During December, the kennel budgeted for 3,700 tenant-days, but its actual level of activity was 3,650 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting: Actual results for December: The spending variance for facility expenses in December would be closest to:

Ruozzo Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for July. When the company prepared its planning budget at the beginning of July, it assumed that 27 customers would have been served. However, 22 customers were actually served during July. The spending variance for "Travel expenses" for July would have been closest to:

Standahl Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $39,590 per month plus $2,649 per flight plus $4 per passenger. The company expected its activity in August to be 82 flights and 294 passengers, but the actual activity was 85 flights and 297 passengers. The actual cost for plane operating costs in August was $255,690. The plane operating costs in the planning budget for August would be closest to:

Rudick Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. When the company prepared its planning budget at the beginning of July, it assumed that 34 wells would have been serviced. However, 36 wells were actually serviced during July. The activity variance for revenue for July would have been closest to:

Korsak Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. The planning budget for October was based on serving 23 customers, but a total of 19 customers were actually served during October. The activity variance for net operating income for October would have been closest to: