Exam 9: Flexible Budgets and Performance Analysis

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 flexible budget for July 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 2,500 tenant-days, but its actual level of activity was 2,480 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:

Wember 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 $550 per month plus $77 per job plus $13 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 September to be 18 jobs and 148 meals, but the actual activity was 14 jobs and 145 meals. The actual cost for catering supplies in September was $3,340. The catering supplies in the planning budget for September would be closest to:

Bartosiewicz Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 5,200 client-visits, but its actual level of activity was 5,220 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 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 January would be closest to:

Pratte Boat Wash's cost formula for its cleaning equipment and supplies is $2,460 per month plus $49 per boat. For the month of April, the company planned for activity of 58 boats, but the actual level of activity was 18 boats. The actual cleaning equipment and supplies for the month was $3,470.The spending variance for cleaning equipment and supplies in April would be closest to:

When the activity measure is the number of units sold, the revenue variance is favorable if the average actual selling price is greater than expected.

Courington Detailing's cost formula for its materials and supplies is $1,970 per month plus $8 per vehicle. For the month of August, the company planned for activity of 92 vehicles, but the actual level of activity was 57 vehicles. The actual materials and supplies for the month was $2,650.The materials and supplies in the planning budget for August would be closest to:

Buckson Framing's cost formula for its supplies cost is $1,350 per month plus $18 per frame. For the month of June, the company planned for activity of 716 frames, but the actual level of activity was 713 frames. The actual supplies cost for the month was $14,820. The supplies cost in the flexible budget for June would be closest to:

The activity variance for revenue in October would be:

Keisker Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,190 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 occupancy expenses in the flexible budget for November 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 $39,590 per month plus $2,649 per flight plus $4 per passenger. The company expected its activity in August to be 82 flights and 294 passengers, but the actual activity was 85 flights and 297 passengers. The actual cost for plane operating costs in August was $255,690.The plane operating costs in the flexible budget for August would be closest to:

Laizure Clinic uses patient-visits as its measure of activity. The clinic bases its budgets on the following information: Revenue should be $55.90 per patient-visit. Personnel expenses should be $35,700 per month plus $15.80 per patient-visit. Medical supplies should be $2,000 per month plus $11.20 per patient-visit. Occupancy expenses should be $8,400 per month plus $2.00 per patient-visit. Administrative expenses should be $3,900 per month plus $0.10 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).

Varriano Corporation bases its budgets on the activity measure customers served. During October, the company planned to serve 31,000 customers, but actually served 34,000 customers. The company has provided the following data concerning the formulas it uses in its budgeting: Required:Prepare a report showing the company's activity variances for October. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

Kirnon 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 $300 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 27 jobs and 224 meals, but the actual activity was 29 jobs and 227 meals. The actual cost for catering supplies in October was $7,500. The activity variance for catering supplies in October would be 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 "Employee salaries and wages" in the planning budget for November would have been closest to:

Courington Detailing's cost formula for its materials and supplies is $1,990 per month plus $4 per vehicle. For the month of August, the company planned for activity of 94 vehicles, but the actual level of activity was 54 vehicles. The actual materials and supplies for the month was $2,250.The activity variance for materials and supplies in August would be closest to:

Elvin Hospital bases its budgets on patient-visits. The hospital's static planning budget for May appears below: Required:Prepare a flexible budget for 8,800 patient-visits per month.

Klingshirn 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 December. When the company prepared its planning budget at the beginning of December, it assumed that 25 customers would have been served. However, 23 customers were actually served during December. Required:Prepare a performance report showing the company's activity and revenue and spending variances for December. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

Keisker Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 2,400 client-visits, but its actual level of activity was 2,390 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 personnel expenses in the planning budget for November would be closest to:

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 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 January would be closest to: