Exam 8: Flexible Budgets and Performance Analysis

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 spending variance for medical supplies in December would be closest to:

During January,Agron Clinic plans for an activity level of 2,500 patient-visits.The clinic uses the following revenue and cost formulas in its budgeting,where q is the number of patient-visits: Revenue: $51.50q Personnel expenses: $33,800 + $16.60q Medical supplies: $700 + $7.40q Occupancy expenses: $10,900 + $2.10q Administrative expenses: $4,300 + $0.40q Required: Prepare the clinic's planning budget for January.

Figliola Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 6,700 units, but its actual level of activity was 6,680 units. The company 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 activity variance for direct labor in October would be closest to:

Herard Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 7,900 units, but its actual level of activity was 7,890 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Actual results for March: -The net operating income in the flexible budget for March would be closest to:

Herard Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 7,900 units, but its actual level of activity was 7,890 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Actual results for March: -The direct materials in the flexible budget for March would be closest to:

Aubuchon Urban Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for March was based on 3,400 meals,but the diner actually served 3,100 meals.The diner's director has provided the following cost data to use in the budget: groceries,$2.90 per meal;kitchen operations,$4,900 per month plus $1.05 per meal;administrative expenses,$3,600 per month plus $0.25 per meal;and fundraising expenses,$1,700 per month. Required: Prepare a report showing the activity variances for each of the expenses and for total expenses for March.Label each variance as favorable (F)or unfavorable (U).

The revenue and spending variances are the differences between the static planning budget and the actual results for the period.

Mock Clinic uses client-visits as its measure of activity. During August, the clinic budgeted for 3,100 client-visits, but its actual level of activity was 3,150 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 net operating income in the planning budget for August 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 medical supplies in the flexible budget for June would be closest to:

Karmazyn Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below: -The total variable cost at the activity level of 9,000 patient-visits per month should be:

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 direct labor in the planning budget for May would be closest to:

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).

The activity variance for revenue is unfavorable if the revenue in the flexible budget is less than the revenue in the static planning budget.

Dukeman 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 7,100 units, but its actual level of activity was 7,060 units. The company has provided the following data concerning the formulas to be used in its budgeting: -The direct materials in the flexible budget for February 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).

Hanekamp 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 5,400 units, but its actual level of activity was 5,440 units. The company has provided the following data concerning the formulas to be used in its budgeting: -The direct materials in the flexible budget for August would be closest to:

Fudala Snow Removal's cost formula for its vehicle operating cost is $1,480 per month plus $308 per snow-day.For the month of March,the company planned for activity of 11 snow-days,but the actual level of activity was 16 snow-days.The actual vehicle operating cost for the month was $6,130.The spending variance for vehicle operating cost in March would be closest to:

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.

Sammartino Clinic uses patient-visits as its measure of activity.The following report compares the planning budget to the actual operating results for the month of November: Required: Prepare the clinic's flexible budget performance report for November.Label each variance as favorable (F)or unfavorable (U).

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: