Question 1

The main difference between a flexible budget and a static budget is that the static budget is not adjusted for changes in the level of activity.

Accepted Answer

A) True 
 B)False

Question 2

Dubberly Corporation's cost formula for its manufacturing overhead is $30,600 per month plus $64 per machine-hour. For the month of March, the company planned for activity of 7,900 machine-hours, but the actual level of activity was 7,880 machine-hours. The actual manufacturing overhead for the month was $558,610.The manufacturing overhead in the flexible budget for March would be closest to:

Accepted Answer

A)  $558,610 
B)  $536,200 
C)  $534,843 
D)  $534,920 
A)  $558,610 
B)  $536,200 
C)  $534,843 
D)  $534,920

Question 3

Stegemann 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 May.   When the company prepared its planning budget at the beginning of May, it assumed that 27 containers would have been refurbished. However, 29 containers were actually refurbished during May.The activity variance for total expenses for May would have been closest to:

Accepted Answer

A)  $3,600 Favorable 
B)  $3,600 Unfavorable 
C)  $4,900 Unfavorable 
D)  $4,900 Favorable 
A)  $3,600 Favorable 
B)  $3,600 Unfavorable 
C)  $4,900 Unfavorable 
D)  $4,900 Favorable

Question 4

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 activity variance for personnel expenses in February would be closest to:

Accepted Answer

A)  $845 U 
B)  $1,075 F 
C)  $1,075 U 
D)  $845 F 
A)  $845 U 
B)  $1,075 F 
C)  $1,075 U 
D)  $845 F

Question 5

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 "Employee salaries and wages" in the flexible budget for January would have been closest to:

Accepted Answer

A)  $77,100 
B)  $65,348 
C)  $80,200 
D)  $82,100 
A)  $77,100 
B)  $65,348 
C)  $80,200 
D)  $82,100

Question 6

Rhed 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 3,700 tenant-days, but its actual level of activity was 3,650 tenant-days. The kennel 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 wages and salaries in the planning budget for December would be closest to:

Accepted Answer

A)  $30,575 
B)  $30,994 
C)  $30,305 
D)  $30,690 
A)  $30,575 
B)  $30,994 
C)  $30,305 
D)  $30,690

Question 7

Stegemann 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 May.   When the company prepared its planning budget at the beginning of May, it assumed that 27 containers would have been refurbished. However, 29 containers were actually refurbished during May.The revenue in the company's flexible budget for May would have been closest to:

Accepted Answer

A)  $145,614 
B)  $153,700 
C)  $143,100 
D)  $156,400 
A)  $145,614 
B)  $153,700 
C)  $143,100 
D)  $156,400

Question 8

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 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 May would be closest to:

Accepted Answer

A)  $3,595 F 
B)  $2,750 F 
C)  $2,750 U 
D)  $3,595 U 
A)  $3,595 F 
B)  $2,750 F 
C)  $2,750 U 
D)  $3,595 U

Question 9

Stegemann 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 May.   When the company prepared its planning budget at the beginning of May, it assumed that 27 containers would have been refurbished. However, 29 containers were actually refurbished during May.The amount shown for "Other expenses" in the planning budget for May would have been closest to:

Accepted Answer

A)  $42,900 
B)  $42,400 
C)  $41,900 
D)  $39,010 
A)  $42,900 
B)  $42,400 
C)  $41,900 
D)  $39,010

Question 10

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 administrative expenses in the planning budget for April would be closest to:

Accepted Answer

A)  $7,972 
B)  $8,052 
C)  $7,980 
D)  $8,096 
A)  $7,972 
B)  $8,052 
C)  $7,980 
D)  $8,096

Question 11

Bartosiewicz Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 3,500 client-visits, but its actual level of activity was 3,490 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 net operating income in the planning budget for January would be closest to:

Accepted Answer

A)  $13,312 
B)  $13,500 
C)  $6,400 
D)  $6,364 
A)  $13,312 
B)  $13,500 
C)  $6,400 
D)  $6,364

Question 12

Kirkeby 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.   When the company prepared its planning budget at the beginning of May, it assumed that 32 containers would have been refurbished. However, 34 containers were actually refurbished during May.The "Refurbishing materials" in the flexible budget for May would have been closest to:

Accepted Answer

A)  $22,682 
B)  $24,100 
C)  $22,400 
D)  $23,800 
A)  $22,682 
B)  $24,100 
C)  $22,400 
D)  $23,800

Question 13

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 net operating income in the planning budget for November would have been closest to:

Accepted Answer

A)  $26,000 
B)  $9,100 
C)  $23,500 
D)  $22,645 
A)  $26,000 
B)  $9,100 
C)  $23,500 
D)  $22,645

Question 14

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

Accepted Answer

A)  $31,460 
B)  $31,660 
C)  $31,700 
D)  $31,636 
A)  $31,460 
B)  $31,660 
C)  $31,700 
D)  $31,636

Question 15

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 4,000 tenant-days, but its actual level of activity was 4,040 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 facility expenses in March would be closest to:

Accepted Answer

A)  $336 F 
B)  $200 U 
C)  $336 U 
D)  $200 F 
A)  $336 F 
B)  $200 U 
C)  $336 U 
D)  $200 F

Question 16

Moncrief Corporation bases its budgets on machine-hours. The company'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 should be:

Accepted Answer

A)  $30 F 
B)  $1,690 F 
C)  $1,690 U 
D)  $30 U 
A)  $30 F 
B)  $1,690 F 
C)  $1,690 U 
D)  $30 U

Question 17

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 net operating income in the flexible budget for January would be closest to:

Accepted Answer

A)  $13,878 
B)  $13,788 
C)  $12,963 
D)  $13,070 
A)  $13,878 
B)  $13,788 
C)  $12,963 
D)  $13,070

Question 18

Ostler Hotel bases its budgets on guest-days. The hotel's static budget for April appears below:   The total overhead cost at an activity level of 9,700 guest-days per month should be:

Accepted Answer

A)  $213,150 
B)  $237,650 
C)  $223,950 
D)  $224,920 
A)  $213,150 
B)  $237,650 
C)  $223,950 
D)  $224,920

Question 19

Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 3,550 client-visits, but its actual level of activity was 3,490 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:

Accepted Answer

A)  $366 F 
B)  $1,116 F 
C)  $366 U 
D)  $1,116 U 
A)  $366 F 
B)  $1,116 F 
C)  $366 U 
D)  $1,116 U

Question 20

Bracken Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,100 client-visits, but its actual level of activity was 2,140 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for September:Data used in budgeting:   Actual results for September:
  The spending variance for occupancy expenses in September would be closest to:

Accepted Answer

A)  $10 F 
B)  $106 F 
C)  $10 U 
D)  $106 U 
A)  $10 F 
B)  $106 F 
C)  $10 U 
D)  $106 U

The main difference between a flexible budget and a static budget is that the static budget is not adjusted for changes in the level of activity.

Moncrief Corporation bases its budgets on machine-hours. The company'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 should be:

Ostler Hotel bases its budgets on guest-days. The hotel's static budget for April appears below: The total overhead cost at an activity level of 9,700 guest-days per month should be:

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Product Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Master Budgeting

Standard Costs and Variances

Responsibility Accounting Systems

Strategic Performance Measurement

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

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Exam 9: Flexible Budgets and Performance Analysis

The main difference between a flexible budget and a static budget is that the static budget is not adjusted for changes in the level of activity.

Moncrief Corporation bases its budgets on machine-hours. The company'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 should be:

Ostler Hotel bases its budgets on guest-days. The hotel's static budget for April appears below: The total overhead cost at an activity level of 9,700 guest-days per month should be:

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Product Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Master Budgeting

Standard Costs and Variances

Responsibility Accounting Systems

Strategic Performance Measurement

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters