Exam 9: Flexible Budgets Standard Costs and Variance Analysis

The variance for net operating income in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for March would have been closest to:

The labor rate variance for the month is closest to:

The materials price variance for April is:

The following standards have been established for a raw material used to make product O84: The following data pertain to a recent month's operations: The direct materials purchases variance is computed when the materials are purchased. Required: a.What is the materials price variance for the month? b.What is the materials quantity variance for the month?

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.

Kolstad Clinic uses patient-visits as its measure of activity.During September, the clinic budgeted for 2,200 patient-visits, but its actual level of activity was 2,600 patient-visits.The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits: Revenue: $61.70q Personnel expenses: $39,000 + $16.10q Medical supplies: $1,300 + $11.90q Occupancy expenses: $8,200 + $2.20q Administrative expenses: $5,900 + $0.20q The clinic reported the following actual results for September: Required: Prepare a report showing the clinic's revenue and spending variances for September.Label each variance as favorable (F)or unfavorable (U).

During June, Montera Clinic budgeted for 3,800 patient-visits, but its actual level of activity was 3,400 patient-visits.Revenue should be $25.20 per patient-visit.Personnel expenses should be $22,600 per month plus $7.00 per patient-visit.Medical supplies should be $800 per month plus $4.80 per patient-visit.Occupancy expenses should be $6,900 per month plus $0.90 per patient-visit.Administrative expenses should be $4,800 per month plus $0.40 per patient-visit. Required: Prepare the clinic's flexible budget for June based on the actual level of activity for the month.

The materials price variance for August is:

The materials quantity variance for July is:

The variable overhead rate variance for January is:

A spending variance is the difference between the amount of the cost in the static planning budget and the amount of the cost in the flexible budget.

Younker 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 April. When the company prepared its planning budget at the beginning of April, it assumed that 31 containers would have been refurbished.However, 34 containers were actually refurbished during April. The spending variance for "Other expenses" for April would have been closest to:

The variable overhead efficiency variance for the month is closest to:

The materials quantity variance for August is:

The materials quantity variance for January is:

Cardero Midwifery's cost formula for its wages and salaries is $2,280 per month plus $348 per birth.For the month of August, the company planned for activity of 118 births, but the actual level of activity was 116 births.The actual wages and salaries for the month was $44,120.The wages and salaries in the planning budget for August would be closest to:

The variable overhead rate variance for August is:

A favorable spending variance occurs when the actual cost is less than the amount of the cost in the static planning budget.

Fixed costs should not be included in a flexible budget because they do not change when the level of activity changes.

The materials quantity variance for April is: