Exam 11: Flexible Budgets and Performance Analysis

The activity variance for net operating income in October would be closest to:

Tsui Clinic uses patient-visits as its measure of activity. During November, the clinic budgeted for 3,400 patient-visits, but its actual level of activity was 2,900 patient-visits. The clinic bases its budgets on the following information: Revenue should be $30.00 per patient-visit. Personnel expenses should be $30,200 per month plus $7.70 per patient-visit. Medical supplies should be $1,600 per month plus $5.20 per patient-visit. Occupancy expenses should be $7,400 per month plus $1.00 per patient-visit. Administrative expenses should be $3,900 per month plus $0.20 per patient-visit. The clinic reported the following actual results for November: Required: Prepare the clinic's flexible budget performance report for November. Label each variance as favorable (F) or unfavorable (U).

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

Thomasson Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $36,160 per month plus $2,038 per flight plus $1 per passenger. The company expected its activity in April to be 73 flights and 223 passengers, but the actual activity was 72 flights and 228 passengers. The actual cost for plane operating costs in April was $179,020. The activity variance for plane operating costs in April would be closest to:

The activity variance for personnel expenses in October would be closest to:

The spending variance for occupancy costs in the flexible budget performance report for the month is:

The selling and administrative expenses in the planning budget for May would be closest to:

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

Moss Clinic bases its budgets on the activity measure patient-visits. During August, the clinic planned for an activity level of 2,100 patient-visits, but the activity level was actually 2,400 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 August based on the actual level of activity for the month.

Fongeallaz Clinic bases its budgets on the activity measure patient-visits. During January, the clinic planned for 2,300 patient-visits, but its actual level of activity was 2,100 patient-visits. Revenue should be $52.50 per patient-visit. Personnel expenses should be $34,100 per month plus $15.10 per patient-visit. Medical supplies should be $1,600 per month plus $8.40 per patient-visit. Occupancy expenses should be $9,400 per month plus $1.90 per patient-visit. Administrative expenses should be $3,500 per month plus $0.10 per patient-visit. Required: Prepare a report showing the clinic's activity variances for January. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

The total variable cost at the activity level of 9,000 patient-visits per month should be:

Hemphill Corporation uses customers served as its measure of activity. During June, the company budgeted for 20,000 customers, but actually served 19,000 customers. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Actual results for June: Required: Prepare the company's flexible budget performance report for June. Label each variance as favorable (F) or unfavorable (U).

Vieyra Corporation uses customers served as its measure of activity. During November, the company budgeted for 36,000 customers, but actually served 39,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $2.50q Wages and salaries: $21,500 + $0.70q Supplies: $0.40q Insurance: $6,100 Miscellaneous: $3,700 + $0.40q The company reported the following actual results for November: Required: Prepare the company's flexible budget performance report for November. Label each variance as favorable (F) or unfavorable (U).

The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for August would be closest to:

An activity variance is due solely to the difference between the level of activity assumed in the planning budget and the actual level of activity used in the flexible budget.

Blockmon Hospital bases its budgets on patient-visits. The hospital's static planning budget for November appears below: Required: Prepare a flexible budget for 8,600 patient-visits per month.

The activity variance for wages and salaries in June would be closest to:

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

The facility expenses in the flexible budget for March would be closest to:

Pinion Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for August was based on 2,700 meals. The diner's director has provided the following cost formulas to use in budgets: The director has also provided the diner's statement of actual expenses for the month: Required: Prepare a report showing the spending variances for each of the expenses and for total expenses for August. Label each variance as favorable (F) or unfavorable (U).