Exam 9: Performance Measurement in Decentralized Organizations

Lartey Corporation's cost formula for its selling and administrative expense is $22,200 per month plus $27 per unit. For the month of December, the company planned for activity of 5,300 units, but the actual level of activity was 5,270 units. The actual selling and administrative expense for the month was $168,150. The selling and administrative expense in the flexible budget for December would be closest to:

The following data for March have been provided by Fickling Corporation, a producer of precision drills for oil exploration: Required: Compute the variable overhead rate variances for indirect labor and for power for March. Indicate whether each of the variances is favorable (F) or unfavorable (U). Show your work!

Which of the following would produce a materials price variance?

Kowaleski Corporation makes a product with the following standard costs: In June the company produced 9,100 units using 27,010 kilos of the direct material and 930 direct labor-hours. During the month the company purchased 30,600 kilos of the direct material at a price of $3.70 per kilo. The actual direct labor rate was $19.90 per hour and the actual variable overhead rate was $4.20 per hour. The materials price variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours. Required: a. Compute the materials quantity variance. b. Compute the materials price variance. c. Compute the labor efficiency variance. d. Compute the labor rate variance. e. Compute the variable overhead efficiency variance. f. Compute the variable overhead rate variance.

Eliezrie Corporation makes a product with the following standard costs: In January the company's budgeted production was 7,400 units but the actual production was 7,500 units. The company used 45,580 kilos of the direct material and 2,030 direct labor-hours to produce this output. During the month, the company purchased 48,500 kilos of the direct material at a cost of $53,350. The actual direct labor cost was $18,473 and the actual variable overhead cost was $7,714. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The labor rate variance for January is:

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. Variable manufacturing overhead standards are based on machine-hours. The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month?

Mcindoe Clinic bases its budgets on the activity measure patient-visits. During May, the clinic planned for an activity level of 3,200 patient-visits, but the activity level was actually 3,600 patient-visits. The clinic has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare the clinic's flexible budget for May based on the actual level of activity for the month.

Buonocore Clinic uses client-visits as its measure of activity. During August, the clinic budgeted for 2,800 client-visits, but its actual level of activity was 2,770 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for August: Data used in budgeting: Actual results for August: The spending variance for medical supplies in August would be closest to:

The following standards for variable overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: Required: a. What is the variable overhead rate variance for the month? b. What is the variable overhead efficiency variance for the month?

The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month?

Wesolick Clinic uses client-visits as its measure of activity. During August, the clinic budgeted for 2,900 client-visits, but its actual level of activity was 2,870 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for August: Data used in budgeting: Actual results for August: The medical supplies in the flexible budget for August would be closest to:

Vanderhyde 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 May, the kennel budgeted for 3,300 tenant-days, but its actual level of activity was 3,340 tenant-days. The kennel 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 administrative expenses in the planning budget for May would be closest to:

Zike Corporation's static planning budget for October appears below. The company bases its budgets on machine-hours. In October, the actual number of machine-hours was 6,000, the actual supplies cost was $14,740, the actual power cost was $49,170, the actual salaries cost was $15,390, and the actual equipment depreciation was $63,670. The spending variance for supplies cost in the performance report for the month should be:

Tabeling Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During August, the company budgeted for 6,500 units, but its actual level of activity was 6,540 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for August: Data used in budgeting: Actual results for August: The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the revenue and spending variances report) for August would be closest to:

Leaphart 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 May, the kennel budgeted for 2,800 tenant-days, but its actual level of activity was 2,840 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: The administrative expenses in the planning budget for May would be closest to:

Prater Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During February, the company budgeted for 5,400 units, but its actual level of activity was 5,380 units. The company 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 manufacturing overhead in the flexible budget for February would be closest to:

Oddo Corporation makes a product with the following standard costs: The company reported the following results concerning this product in December. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The materials price variance for December is:

Wesolick Clinic uses client-visits as its measure of activity. During August, the clinic budgeted for 2,900 client-visits, but its actual level of activity was 2,870 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for August: Data used in budgeting: Actual results for August: The spending variance for medical supplies in August would be closest to:

The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month?

Hien Inc., uses machine-hours as the base to apply its manufacturing overhead. The following information relates to variable manufacturing overhead standards at Hien: Standard rate per machine-hour: $50 Total standard machine-hours allowed for units produced during September: 4,000 Hien's variable overhead rate variance for September was $800 favorable. Its variable overhead efficiency variance was $3,600 unfavorable. How many machine-hours did Hien actually use during September?