Exam 8: Flexible Budgets and Performance Analysis

Amadon 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 7,900 units, but its actual level of activity was 7,920 units. The company has provided the following data concerning the formulas to be used in its budgeting: -The selling and administrative expenses in the planning budget for July would be closest to:

Diskind 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 6,650 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 revenue variance for October would be closest to:

Clore 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 March, the kennel budgeted for 2,900 tenant-days, but its actual level of activity was 2,920 tenant-days. The kennel 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 facility expenses in the flexible budget for March 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.

Tolentino 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 November, the kennel budgeted for 2,600 tenant-days, but its actual level of activity was 2,620 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting: Actual results for November: -The expendables in the flexible budget for November would be closest to:

Barona Memorial Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for March was based on 2,900 meals,but the diner actually served 3,000 meals.The diner's director has provided the following cost formulas to use in budgets: Required: Prepare the diner's flexible budget for the actual number of meals served in March.The budget will only contain the costs listed above;no revenues will be on the budget.

Nussey Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 2,100 client-visits, but its actual level of activity was 2,050 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:

Mcquain Boat Wash's cost formula for its cleaning equipment and supplies is $1,950 per month plus $20 per boat. For the month of June, the company planned for activity of 85 boats, but the actual level of activity was 125 boats. The actual cleaning equipment and supplies for the month was $4,380. -The spending variance for cleaning equipment and supplies in June would be closest to:

Pong 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 December, the kennel budgeted for 2,000 tenant-days, but its actual level of activity was 1,980 tenant-days. The kennel 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 net operating income in the flexible budget for December would be closest to:

Diskind 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 6,650 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 direct labor in the planning budget for October would be closest to:

Marsee 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 2,500 tenant-days, but its actual level of activity was 2,510 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 activity variance for administrative expenses in June would be closest to:

The activity variance for revenue is favorable if the actual level of activity for the period exceeds the planned level of activity.

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).

Privitera Printing uses two measures of activity, press runs and book set-ups, in the cost formulas in its budgets and performance reports. The cost formula for wages and salaries is $7,220 per month plus $650 per press run plus $1,110 per book set-up. The company expected its activity in January to be 188 press runs and 117 book set-ups, but the actual activity was 191 press runs and 114 book set-ups. The actual cost for wages and salaries in January was $269,270. -The wages and salaries in the planning budget for 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 occupancy expenses in the flexible budget for May would be closest to:

Marsee 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 2,500 tenant-days, but its actual level of activity was 2,510 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 spending variance for expendables in June 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:

Zindell Corporation bases its budgets on the activity measure customers served.During December,the company planned to serve 21,000 customers,but actually served 19,000 customers.The company uses the following revenue and cost formulas in its budgeting,where q is the number of customers served: Revenue: $3.60q Wages and salaries: $21,300 + $1.10q Supplies: $0.70q Insurance: $6,400 Miscellaneous: $3,200 + $0.20q Required: Prepare a report showing the company's activity variances for December.Indicate in each case whether the variance is favorable (F)or unfavorable (U).

Rushton Hospital bases its budgets on patient-visits. The hospital's static planning budget for May appears below: Actual results for the month were: -The spending variance for supplies costs in the flexible budget performance report for the month is:

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 activity variance for personnel expenses in December would be closest to: