Exam 9: Flexible Budgets and Performance Analysis

Loughry 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 $530 per month plus $114 per job plus $16 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 October to be 25 jobs and 234 meals, but the actual activity was 20 jobs and 233 meals. The actual cost for catering supplies in October was $6,600. The catering supplies in the flexible budget for October would be closest to:

Standahl 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 $39,990 per month plus $2,689 per flight plus $8 per passenger. The company expected its activity in August to be 86 flights and 298 passengers, but the actual activity was 89 flights and 301 passengers. The actual cost for plane operating costs in August was $257,690.The plane operating costs in the planning budget for August would be closest to:

Lenci 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 spending variance for manufacturing overhead in May would be closest to:

Virgen 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 May, the kennel budgeted for 3,700 tenant-days, but its actual level of activity was 3,690 tenant-days. The kennel 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 net operating income in the planning budget for May would be closest to:

Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 6,200 units, but its actual level of activity was 6,160 units. The company 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 June: The net operating income in the flexible budget for June 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 net operating income in the flexible budget for January would be closest to:

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.

Gordin 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 May, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was 3,020 tenant-days. The kennel 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 facility expenses in the flexible budget for May would be closest to:

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:

Sincell Corporation uses customers served as its measure of activity. During April, the company budgeted for 22,000 customers, but actually served 24,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:Revenue: $4.10qWages and salaries: $26,000 + $1.10qSupplies: $0.70qInsurance: $7,100Miscellaneous expense: $3,400 + $0.30qThe company reported the following actual results for April: Required:Prepare a report showing the company's revenue and spending variances for April. Label each variance as favorable (F) or unfavorable (U).

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).

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:

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).

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 selling and administrative expenses in the planning budget for July would be closest to:

Kaina Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 3,000 client-visits, but its actual level of activity was 2,970 client-visits. The clinic 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 activity variance for net operating income in May would be closest to:

Paulis 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 February, the kennel budgeted for 4,900 tenant-days, but its actual level of activity was 4,880 tenant-days. The kennel 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 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 February would be closest to:

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 "Other expenses" in the planning budget for November would have been 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 2,000 tenant-days, but its actual level of activity was 2,040 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 spending variance for food and supplies in March 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 $4,300 per month plus $401 per press run plus $951 per book set-up. The company expected its activity in July to be 223 press runs and 130 book set-ups, but the actual activity was 220 press runs and 129 book set-ups. The actual cost for wages and salaries in July was $216,880.The spending variance for wages and salaries in July would be closest to: