Exam 9: Flexible Budgets and Performance Analysis

Salina Clinic uses patient-visits as its measure of activity. The clinic has provided the following report: Required:Prepare the clinic's flexible budget performance report for February. Label each variance as favorable (F) or unfavorable (U).

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 spending variance for medical supplies in November would be closest to:

Lubinsky 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 28 wells would have been serviced. However, 31 wells were actually serviced during August. Required: Prepare a report showing the company's activity variances for August. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

Scharfenberg 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 March. When the company prepared its planning budget at the beginning of March, it assumed that 23 wells would have been serviced. However, 25 wells were actually serviced during March.The activity variance for "Other expenses" for March would have been closest to:

Meinke 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 3,700 tenant-days, but its actual level of activity was 3,680 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 spending variance for food and supplies in April would be closest to:

Dinham 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 March, the kennel budgeted for 5,100 tenant-days, but its actual level of activity was 5,140 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March:Data used in budgeting: Actual results for March: The revenue variance for March 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 direct labor in the planning budget for July would be 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 wages and salaries in the planning budget for July would be closest to:

Kerekes Manufacturing Corporation has prepared the following overhead budget for next month. The company's variable overhead costs are driven by machine-hours.What would be the total budgeted overhead cost for next month if the activity level is 2,400 machine-hours rather than 2,500 machine-hours?

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 total expenses in the flexible budget for January would have been 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 revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for October would have been closest to:

Kawamura 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 2,300 tenant-days, but its actual level of activity was 2,320 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: The administrative expenses in the planning budget for December would be closest to:

Hubbard 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 January, the kennel budgeted for 2,100 tenant-days, but its actual level of activity was 2,060 tenant-days. The kennel 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 wages and salaries in the planning budget for January would be closest to:

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 2,500 meals, but the diner actually served 2,700 meals. The diner's director has provided the following cost data to use in the budget: groceries, $4.15 per meal; kitchen operations, $4,500 per month plus $1.71 per meal; administrative expenses, $3,500 per month plus $0.36 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.

Milot 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 April. When the company prepared its planning budget at the beginning of April, it assumed that 32 wells would have been serviced. However, 29 wells were actually serviced during April.The "Servicing materials" in the flexible budget for April would have been 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 variance for net operating income in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for March 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 personnel expenses in the planning budget for September would be closest to:

At Jacobson Company, indirect labor is a variable cost that varies with direct labor-hours. Last month's performance report showed that actual indirect labor cost totaled $5,780 for the month and that the associated spending variance was $245 Favorable. If 24,100 direct labor-hours were actually worked last month, then the flexible budget cost formula for indirect labor must be (per direct labor-hour):

Isadore Hospital bases its budgets on patient-visits. The hospital'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 is:

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 direct labor in the planning budget for December would be closest to: