Exam 11: Flexible Budgets and Performance Analysis

Akes Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for August was based on 2,200 meals. The diner's director has provided the following cost data to use in the budget: groceries, $3.65 per meal; kitchen operations, $5,400 per month plus $1.85 per meal; administrative expenses, $2,900 per month plus $0.55 per meal; and fundraising expenses, $1,700 per month. The director has also provided the diner's statement of actual expenses for the month: Required: Prepare a flexible budget performance report showing both the activity variances and the spending variances for each of the expenses and for total expenses for August. Label each variance as favorable (F) or unfavorable (U).

The spending variance for expendables in June would be closest to:

The wages and salaries in the planning budget for October would be closest to:

Stailey Clinic uses patient-visits as its measure of activity. During September, the clinic budgeted for 3,200 patient-visits, but its actual level of activity was 2,800 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits: Revenue: $34.90q Personnel expenses: $27,300 + $10.30q Medical supplies: $1,400 + $6.50q Occupancy expenses: $6,000 + $1.80q Administrative expenses: $5,300 + $0.40q 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).

The activity variance for selling and administrative expenses in January would be closest to:

Riggan Tech is a for-profit vocational school. The school bases its budgets on two measures of activity (i.e., cost drivers), namely student and course. The school uses the following data in its budgeting: In December, the school budgeted for 1,970 students and 163 courses. The school's income statement showing the actual results for the month appears below: Required: Prepare a flexible budget performance report showing both the school's activity variances and revenue and spending variances for December. Label each variance as favorable (F) or unfavorable (U).

Hilario Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for September is to be based on 2,600 meals. The diner's director has provided the following cost data to use in the budget: groceries, $2.10 per meal; kitchen operations, $5,600 per month plus $1.80 per meal; administrative expenses, $3,700 per month plus $0.55 per meal; and fundraising expenses, $1,400 per month. Required: Prepare the diner's budget for the month of September. The budget will only contain the costs listed above; no revenues will be on the budget.

The net operating income in the planning budget for May would be closest to:

The administrative expenses in the planning budget for December would be closest to:

The direct materials in the flexible budget for February would be closest to:

The activity variance for direct labor in June would be closest to:

Ingrum Framing's cost formula for its supplies cost is $1,120 per month plus $11 per frame. For the month of June, the company planned for activity of 611 frames, but the actual level of activity was 607 frames. The actual supplies cost for the month was $8,150. The spending variance for supplies cost in June would be closest to:

The medical supplies in the flexible budget for June would be closest to:

Carnes Tech is a for-profit vocational school. The school bases its budgets on two measures of activity (i.e., cost drivers), namely student and course. The school uses the following data in its budgeting: In February, the school budgeted for 1,570 students and 143 courses. The actual activity for the month was 1,370 students and 145 courses. Required: Prepare a report showing the school's activity variances for February. Label each variance as favorable (F) or unfavorable (U).

The expendables in the flexible budget for June would be closest to:

Bolick Midwifery's cost formula for its wages and salaries is $1,800 per month plus $152 per birth. For the month of May, the company planned for activity of 119 births, but the actual level of activity was 114 births. The actual wages and salaries for the month was $19,980. The activity variance for wages and salaries in May would be closest to:

The activity variance for direct labor in October would be closest to:

Gummer Hospital bases its budgets on patient-visits. The hospital's static budget for February appears below: The total overhead cost at an activity level of 10,800 patient-visits per month should be:

Chapnick Clinic bases its budgets on the activity measure patient-visits. During September, the clinic planned for 2,800 patient-visits. The clinic has provided the following data concerning the formulas it uses in its budgeting: The clinic has also furnished its income statement for September: Required: Prepare a report showing the clinic's activity variances for September.

The activity variance for administrative expenses in June would be closest to: