Exam 8: Flexible Budgets and Performance Analysis

Friou Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During July, the company budgeted for 6,300 units, but its actual level of activity was 6,250 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for July: Data used in budgeting: Actual results for July: -The direct labor in the planning budget for July would be closest to:

Brothern Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 6,800 units, but its actual level of activity was 6,820 units. The company 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 net operating income in the planning budget for May would be closest to:

MacPhail Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During April, the company budgeted for 5,600 units, but its actual level of activity was 5,650 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for April: Data used in budgeting: Actual results for April: -The spending variance for direct materials in April would be closest to:

Tuason Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 2,900 client-visits, but its actual level of activity was 2,930 client-visits. The clinic 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 personnel expenses in the planning budget for May would be closest to:

Doubleday Clinic uses client-visits as its measure of activity. During June, the clinic budgeted for 3,200 client-visits, but its actual level of activity was 3,180 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for June: -The administrative expenses in the planning budget for June would be closest to:

Arkin 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 3,100 tenant-days, but its actual level of activity was 3,070 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 expendables in the flexible budget for May would be closest to:

Marchant Urban Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for June was based on 2,200 meals,but the diner actually served 1,800 meals.The diner's director has provided the following cost data to use in the budget: groceries,$3.85 per meal;kitchen operations,$4,300 per month plus $1.70 per meal;administrative expenses,$2,000 per month plus $0.45 per meal;and fundraising expenses,$1,100 per month. Required: Prepare the diner's flexible budget for the actual number of meals served in June.The budget will only contain the costs listed above;no revenues will be on the budget.

Which of the following comparisons best isolates the impact of a change in activity on performance?

Sterr 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 $49,340 per month plus $2,635 per flight plus $2 per passenger. The company expected its activity in January to be 73 flights and 191 passengers, but the actual activity was 75 flights and 193 passengers. The actual cost for plane operating costs in January was $246,440. -The activity variance for plane operating costs in January 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:

Edington Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,800 client-visits, but its actual level of activity was 2,850 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for September: -The net operating income in the planning budget for September would be closest to:

Gotthelf Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,480 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting: Actual results for December: -The medical supplies in the flexible budget for December would be closest to:

Askland Clinic uses client-visits as its measure of activity. During October, the clinic budgeted for 3,100 client-visits, but its actual level of activity was 3,130 client-visits. The clinic 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: -The spending variance for medical supplies in October would be closest to:

Sterr 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 $49,340 per month plus $2,635 per flight plus $2 per passenger. The company expected its activity in January to be 73 flights and 191 passengers, but the actual activity was 75 flights and 193 passengers. The actual cost for plane operating costs in January was $246,440. -The spending variance for plane operating costs in January would be closest to:

Tuason Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 2,900 client-visits, but its actual level of activity was 2,930 client-visits. The clinic 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 spending variance for occupancy expenses in May would be closest to:

Goodfriend 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 2,800 tenant-days, but its actual level of activity was 2,840 tenant-days. The kennel 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: -The revenue variance for June would be closest to:

The purpose of a flexible budget is to:

Sterr 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 $49,340 per month plus $2,635 per flight plus $2 per passenger. The company expected its activity in January to be 73 flights and 191 passengers, but the actual activity was 75 flights and 193 passengers. The actual cost for plane operating costs in January was $246,440. -The plane operating costs in the planning budget for January would be closest to:

A revenue variance is favorable if the revenue in the static planning budget exceeds the revenue in the flexible budget.

Wayland Corporation's static planning budget for April appears below. The company bases its budgets on machine-hours. In April, the actual number of machine-hours was 6,600, the actual supplies cost was $64,040, the actual power cost was $7,070, the actual salaries cost was $88,300, and the actual equipment depreciation was $7,430. -The spending variance for supplies cost in the flexible budget performance report for the month should be: