Exam 9: Flexible Budgets and Performance Analysis

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:

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 wages and salaries in April would be closest to:

Barsness 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 November. When the company prepared its planning budget at the beginning of November, it assumed that 39 wells would have been serviced. However, 43 wells were actually serviced during November.The amount shown for "Other expenses" in the planning budget for November would have been closest to:

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 medical supplies in the flexible budget for February would be closest to:

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 net operating income in July 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 spending variance for total expenses 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 revenue in the planning budget for November would have been closest to:

Mandalay Hotel bases its budgets on guest-days. The hotel's static budget for August appears below: The total variable cost at the activity level of 5,000 guest-days per month should be:

Fager Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 2,390 client-visits, but its actual level of activity was 2,440 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 revenue variance for February would be 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 "Employee salaries and wages" in the flexible budget for October 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:

Prestridge 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 August. When the company prepared its planning budget at the beginning of August, it assumed that 31 customers would have been served. However, 29 customers were actually served during August.The activity variance for net operating income for August would have been closest to:

Guareno Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,800 client-visits, but its actual level of activity was 3,760 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 activity variance for administrative expenses in December would be closest to:

The net operating income (loss) in the flexible budget for October would be:

Schriever 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. The planning budget for May was based on 36 wells serviced, but a total of 31 wells were actually serviced in May.The activity variance for "Employee salaries and wages" for May would have been closest to:

In a flexible budget, what will happen to fixed costs as the activity level increases?

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:

Using a flexible budget, actual results can be compared to what costs should have been at the actual level of activity.

Kekiwi Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During January, the company budgeted for 6,900 units, but its actual level of activity was 6,910 units. The company 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 manufacturing overhead in the flexible budget for January 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 revenue in the company's flexible budget for January would have been closest to: