Exam 9: Performance Measurement in Decentralized Organizations

Diemert Corporation bases its budgets on machine-hours. The company's static planning budget for June appears below: Actual results for the month were: The spending variance for equipment depreciation in the performance report for the month should be:

Gandrud 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 June, the kennel budgeted for 2,600 tenant-days, but its actual level of activity was 2,580 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: The food and supplies in the flexible budget for June 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 net operating income in the flexible budget for February would be closest to: