Exam 9: Flexible Budgets Standard Costs and Variance Analysis

Shaak Corporation uses customers served as its measure of activity.The company bases its budgets on the following information: Revenue should be $3.20 per customer served.Wages and salaries should be $21,000 per month plus $0.80 per customer served.Supplies should be $0.70 per customer served.Insurance should be $5,300 per month.Miscellaneous expenses should be $3,100 per month plus $0.10 per customer served. The company reported the following actual results for October: Required: Prepare a report showing the company's revenue and spending variances for October.Label each variance as favorable (F)or unfavorable (U).

The revenue variance for March would be closest to:

Fixed costs should not be ignored when evaluating how well a manager has controlled costs.

Cosden 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 May, it assumed that 29 wells would have been serviced.However, 31 wells were actually serviced during May. The total expenses in the flexible budget for May would have been closest to:

The materials price variance for January is:

The labor rate variance for June is:

The Fime Corporation uses a standard costing system.The following data have been assembled for December: The standard hours allowed for December's production is:

The food and supplies in the flexible budget for January would be closest to:

The materials price variance for January is:

The materials quantity variance for June is:

Muehlberger 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 28 customers were actually served during April. Required: Prepare a flexible budget for the actual level of activity for April.

The variable overhead rate variance for September is:

The standard amount of materials allowed for the actual output is closest to:

Balladares Inc.has a standard cost system.Variable manufacturing overhead is applied to products on the basis of direct labor-hours.The standard for variable manufacturing overhead is 0.10 hours at $6.30 per hour.The company has reported the following actual results for the product for May: Required: a.Compute the variable overhead rate variance for May. b.Compute the variable overhead efficiency variance for May.

The labor rate variance for January is:

Rivero 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 September, it assumed that 22 containers would have been refurbished. Required: Prepare the company's planning budget for September.

The variable overhead rate variance for July is:

Picozzi Snow Removal's cost formula for its vehicle operating cost is $2,060 per month plus $306 per snow-day.For the month of January, the company planned for activity of 16 snow-days, but the actual level of activity was 18 snow-days.The actual vehicle operating cost for the month was $7,720.The vehicle operating cost in the planning budget for January would be closest to:

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

Nobriga Corporation uses customers served as its measure of activity.During October, the company budgeted for 29,000 customers, but actually served 33,000 customers.The company has provided the following data concerning the formulas used in its budgeting and its actual results for October: Data used in budgeting: Actual results for October: Required: Prepare a report showing the company's revenue and spending variances for October.Label each variance as favorable (F)or unfavorable (U).