Exam 9: Flexible Budgets and Performance Analysis

Benjamin Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. 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 March, it assumed that 26 containers would have been refurbished. However, 23 containers were actually refurbished during March. The amount shown for revenue in the planning budget for March would have been closest to:

Mellenthin Clinic uses patient-visits as its measure of activity. The following report compares the planning budget to the actual operating results for the month of May: Required: Prepare the clinic's flexible budget performance report for May. Label each variance as favorable (F) or unfavorable (U).

Rameriz Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. A total of 34 containers were actually refurbished during May. Required: Prepare a flexible budget for the actual level of activity for May.

Chimilio Clinic uses client-visits as its measure of activity. During June, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,360 client-visits. The clinic 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 January: The medical supplies in the flexible budget for June would be closest to:

Witten 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. A total of 27 customers were actually served during January. The "Other expenses" in the flexible budget for January would have been closest to:

Malander 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 November, the kennel budgeted for 3,400 tenant-days, but its actual level of activity was 3,390 tenant-days. The kennel 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 wages and salaries in the planning budget for November would be closest to:

Sunn Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During November, the company budgeted for 6,100 units, but its actual level of activity was 6,050 units. The company has provided the following data concerning the formulas to be used in its budgeting: The direct materials in the flexible budget for November would be closest to:

ci Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,100 units, but its actual level of activity was 5,050 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Actual results for May: The revenue variance for May would be closest to:

Bartosiewicz Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 3,500 client-visits, but its actual level of activity was 3,490 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting: Actual results for January: The activity variance for net operating income in January would be closest to:

Brong Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for March. When the company prepared its planning budget at the beginning of March, it assumed that 22 containers would have been refurbished. However, 18 containers were actually refurbished during March. The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for March would have been closest to:

Herrod 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 $570 per month plus $98 per job plus $24 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 December to be 11 jobs and 98 meals, but the actual activity was 14 jobs and 102 meals. The actual cost for catering supplies in December was $4,500. The spending variance for catering supplies in December would be closest to:

Spohn Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,370 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for February: The net operating income in the planning budget for February 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 variance for net operating income in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for October would have been closest to:

To help assess how well a manager has controlled costs, actual costs should be compared to what the costs should have been for the actual level of activity.

Sharifi Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below: The total overhead cost at an activity level of 9,200 patient-visits per month should be:

Guareno Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,450 client-visits. The clinic 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 occupancy expenses in the flexible budget for December would be closest to:

Hislop Tech is a for-profit vocational school. The school bases its budgets on two measures of activity (i.e., cost drivers), namely student and course. The school uses the following data in its budgeting: In June, the school budgeted for 1,910 students and 111 courses. The school's income statement showing the actual results for the month appears below: Required: Prepare a report showing the school's revenue and spending variances for June. Label each variance as favorable (F) or unfavorable (U).

Hallet Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,800 units, but its actual level of activity was 5,830 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Actual results for May: The direct labor in the planning budget for May would be closest to:

Tuton Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for July was based on 3,200 meals. The diner's director has provided the following cost formulas to use in budgets: The director has also provided the diner's statement of actual expenses for the month: Required: Prepare a report showing the spending variances for each of the expenses and for total expenses for July. Label each variance as favorable (F) or unfavorable (U).

Wagster Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for November was based on 2,400 meals. The diner's director has provided the following cost data to use in the budget: groceries, $2.05 per meal; kitchen operations, $4,500 per month plus $1.75 per meal; administrative expenses, $3,500 per month plus $0.20 per meal; and fundraising expenses, $1,700 per month. The director has also provided the diner's statement of actual expenses for the month: Required: Prepare a flexible budget performance report showing both the activity variances and the spending variances for each of the expenses and for total expenses for November. Label each variance as favorable (F) or unfavorable (U).