Exam 9: Flexible Budgets and Performance Analysis

Piechocki 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 5,900 units, but its actual level of activity was 5,940 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 materials in the flexible budget for May would be closest to:

Skoff 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 35 containers would have been refurbished. However, 32 containers were actually refurbished during March.The spending variance for "Other expenses" for March would have been closest to:

Birkner Corporation's flexible budget performance report for last month shows that actual indirect materials cost, a variable cost, was $30,444 and that the spending variance for indirect materials cost was $8,142 favorable. During that month, the company worked 17,700 machine-hours. Budgeted activity for the month had been 18,200 machine-hours. The cost formula per machine-hour for indirect materials cost must have been closest to:

During September, Ferman Clinic budgeted for 3,800 patient-visits, but its actual level of activity was 4,100 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits:Revenue: $21.60qPersonnel expenses: $22,600 + $6.60qMedical supplies: $1,000 + $2.60qOccupancy expenses: $6,000 + $0.90qAdministrative expenses: $4,300 + $0.30qRequired: Prepare the clinic's flexible budget for September based on the actual level of activity for the month.

Skoff 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 35 containers would have been refurbished. However, 32 containers were actually refurbished during March.The activity variance for "Other expenses" for March would have been closest to:

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.

Wellmann 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 February. When the company prepared its planning budget at the beginning of February, it assumed that 35 customers would have been served. However, 31 customers were actually served during February.The spending variance for total expenses for February would have been closest to:

Prowse 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. A total of 42 wells were actually serviced during October.The total expenses in the flexible budget for October would have been closest to:

A.L.T. Furniture, Incorporated is a chair repair company. The company bases its budgets and performance reports on two measures of activity (i.e., cost drivers), chairs repaired and repair hours. Each chair is repaired for a flat fee regardless of the hours worked on the chair. The company uses the following data in its budgeting: In January, the company budgeted for 183 chairs and 889 repair hours. The actual activity for the month was 190 chairs and 732 hours. Required:Prepare a planning budget, a flexible budget, and a performance report showing the company's activity and revenue and spending variances for January. On the performance report indicate in each case whether the variance is favorable (F) or unfavorable (U).

Fager Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,250 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February:Data used in budgeting: Actual results for February: The spending variance for medical supplies in February 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 medical supplies in the flexible budget for February would be closest to:

Bartosiewicz Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 4,400 client-visits, but its actual level of activity was 4,380 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:

Schoening 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 January. When the company prepared its planning budget at the beginning of January, it assumed that 40 containers would have been refurbished. However, 38 containers were actually refurbished during January.The amount shown for "Employee salaries and wages" in the planning budget for January would have been 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 administrative expenses in the planning budget for September would be closest to:

The activity variance for net operating income in October would be:

Neubert Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During December, the company budgeted for 5,300 units, but its actual level of activity was 5,340 units. The company 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 manufacturing overhead in the flexible budget for December would be closest to:

Piechocki 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 8,200 units, but its actual level of activity was 8,250 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:

Lawes Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During July, the company budgeted for 5,000 units, but its actual level of activity was 5,050 units. The company has provided the following data concerning the formulas to be used in its budgeting: The net operating income in the planning budget for July would be closest to:

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 direct labor in March 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 activity variance for personnel expenses in November would be closest to: