Exam 9: Flexible Budgets and Performance Analysis

Medlar Corporation's static planning budget for June appears below. The company bases its budgets on machine-hours. In June, the actual number of machine-hours was 9,300, the actual supplies cost was $19,760, the actual power cost was $35,720, the actual salaries cost was $27,130, and the actual equipment depreciation was $39,430.The spending variance for equipment depreciation in the flexible budget performance report for the month should be:

Laizure Clinic uses patient-visits as its measure of activity. The clinic bases its budgets on the following information: Revenue should be $59.90 per patient-visit. Personnel expenses should be $36,100 per month plus $16.20 per patient-visit. Medical supplies should be $2,400 per month plus $11.60 per patient-visit. Occupancy expenses should be $8,800 per month plus $4.00 per patient-visit. Administrative expenses should be $4,300 per month plus $2.10 per patient-visit.The clinic reported the following actual results for November: Required:Prepare a report showing the clinic's revenue and spending variances for November. Label each variance as favorable (F) or unfavorable (U).

Chaloux Clinic bases its budgets on the activity measure patient-visits. During July, the clinic planned for 3,100 patient-visits. The clinic has provided the following data concerning the formulas it uses in its budgeting: The clinic has also furnished its income statement for July: Required:Prepare a report showing the clinic's activity variances for July.

Manter 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 6,900 units, but its actual level of activity was 6,940 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 spending variance for direct materials in June 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 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 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 March 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 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 June would be closest to:

Mellenthin Clinic uses patient-visits as its measure of activity. The following report compares the planning budget to the actual operating results for the month of May: Required:Prepare the clinic's flexible budget performance report for May. Label each variance as favorable (F) or unfavorable (U).

Manter 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 6,900 units, but its actual level of activity was 6,940 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 activity variance for direct labor in June would be closest to:

Manter 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 6,900 units, but its actual level of activity was 6,940 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 direct materials in the flexible budget for June would be 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 net operating income in the planning budget for December would be closest to:

Bruer Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide. The company uses the following data in its budgeting: In November, the company budgeted for 386 guests and 181 jeeps. The actual activity for the month was 392 guests and 158 jeeps. Required: Prepare a report showing the company's activity variances for November. Label each variance as favorable (F) or unfavorable (U).

Dure Corporation's cost formula for its selling and administrative expense is $24,500 per month plus $1 per unit. For the month of July, the company planned for activity of 7,200 units, but the actual level of activity was 7,160 units. The actual selling and administrative expense for the month was $31,460.The activity variance for selling and administrative expense in July would be closest to:

Pattison 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 May, it assumed that 20 customers would have been served. However, 17 customers were actually served during May.The activity variance for "Travel expenses" for May would have been closest to:

Cryan Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide. The company uses the following data in its budgeting: In May, the company budgeted for 497 guests and 202 jeeps. The company's income statement showing the actual results for the month appears below: Required: Prepare a report showing the company's revenue and spending variances for May. Label each variance as favorable (F) or unfavorable (U).

Wytch Corporation bases its budgets on machine-hours. The company's static planning budget for February appears below: Required:Prepare a flexible budget for 6,400 machine-hours per month.

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 revenue variance for March would be closest to:

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 spending variance for "Other expenses" for April would have been closest to:

A flexible budget performance report with more than one cost driver can contain activity variances but not revenue or spending variances due to the increased complexity.

Tessmer 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 3,100 tenant-days, but its actual level of activity was 3,090 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 food and supplies in the flexible budget for January 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 medical supplies in the flexible budget for November would be closest to: