Exam 9: Flexible Budgets and Performance Analysis

Capelli Hospital bases its budgets on patient-visits. The hospital's static budget for August appears below: The total variable cost at the activity level of 9,300 patient-visits per month should be:

Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 2,000 client-visits, but its actual level of activity was 2,010 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: The activity variance for personnel expenses in July would be closest to:

Feemster Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 5,900 units, but its actual level of activity was 5,850 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for October: Data used in budgeting: Actual results for October: The activity variance for selling and administrative expenses in October would be closest to:

Neighbors 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 April, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was 2,960 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for April: Data used in budgeting: Actual results for April: The activity variance for administrative expenses in April would be closest to:

Canniff 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 $56,560 per month plus $2,618 per flight plus $5 per passenger. The company expected its activity in February to be 63 flights and 254 passengers, but the actual activity was 62 flights and 255 passengers. The actual cost for plane operating costs in February was $218,820. The plane operating costs in the planning budget for February would be closest to:

Keisker Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,190 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 activity variance for administrative expenses in November would be closest to:

Roberds 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 March, the school budgeted for 1,710 students and 68 courses. The school's income statement showing the actual results for the month appears below: Required: Prepare a flexible budget performance report showing both the school's activity variances and revenue and spending variances for March. Label each variance as favorable (F) or unfavorable (U).

Brookings 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 August, it assumed that 34 wells would have been serviced. Required: Prepare the company's planning budget for August.

Bugos 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. When the company prepared its planning budget at the beginning of March, it assumed that 40 customers would have been served. The amount shown for "Employee salaries and wages" in the planning budget for March would have been closest to:

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 net operating income in the planning budget for November would have been closest to:

Ekholm 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 December, it assumed that 30 containers would have been refurbished. However, 35 containers were actually refurbished during December. The activity variance for "Employee salaries and wages" for December would have been closest to:

Moncrief Corporation bases its budgets on machine-hours. The company's static planning budget for July appears below: Actual results for the month were: The spending variance for supplies costs in the flexible budget performance report for the month should be:

Lochner 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 and the actual results of operations for June. When the company prepared its planning budget at the beginning of June, it assumed that 24 wells would have been serviced. However, 26 wells were actually serviced during June. The activity variance for "Employee salaries and wages" for June would have been closest to:

Duprey Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,150 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 net operating income in the planning budget for January would be closest to:

Courington Detailing's cost formula for its materials and supplies is $2,420 per month plus $9 per vehicle. For the month of August, the company planned for activity of 63 vehicles, but the actual level of activity was 33 vehicles. The actual materials and supplies for the month was $2,840. The activity variance for materials and supplies in August 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 net operating income in the planning budget for September would be closest to:

Rizzio 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 September, the school budgeted for 1,820 students and 173 courses. The actual activity for the month was 2,020 students and 178 courses. Required: Prepare the school's planning budget for September.

Bracken Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,100 client-visits, but its actual level of activity was 2,140 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for September: Data used in budgeting: Actual results for September: The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for September would be closest to:

Speyer Medical Clinic measures its activity in terms of patient-visits. Last month, the budgeted level of activity was 1,530 patient-visits and the actual level of activity was 1,490 patient-visits. The cost formula for administrative expenses is $4.00 per patient-visit plus $15,300 per month. The actual administrative expense was $19,810. In the clinic's flexible budget performance report for last month, the spending variance for administrative expenses was:

A revenue variance is favorable if the actual revenue is greater than the revenue in the static planning budget.