Exam 8: Flexible Budgets and Performance Analysis

Poch Memorial 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 2,700 meals.The diner's director has provided the following cost formulas to use in the budget: 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.

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

Galligan Corporation bases its budgets on the activity measure customers served.During July,the company planned to serve 30,000 customers.The company has provided the following data concerning the formulas it uses in its budgeting: The company has also furnished its income statement for July: Required: Prepare a report showing the company's activity variances for July.Indicate in each case whether the variance is favorable (F)or unfavorable (U).

Dreyfus Memorial Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for April was based on 2,100 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 flexible budget performance report showing both the activity variances and the spending variances for each of the expenses and for total expenses for April.Label each variance as favorable (F)or unfavorable (U).

Fullagar Corporation's cost formula for its manufacturing overhead is $15,400 per month plus $11 per machine-hour. For the month of May, the company planned for activity of 7,500 machine-hours, but the actual level of activity was 7,540 machine-hours. The actual manufacturing overhead for the month was $102,710. -The spending variance for manufacturing overhead in May would be closest to:

Scarfo Hotel bases its budgets on guest-days.The hotel's static budget for December appears below: The total overhead cost at an activity level of 2,900 guest-days per month should be:

Brayboy Tile Installation Corporation measures its activity in terms of square feet of tile installed.Last month,the budgeted level of activity was 1,360 square feet and the actual level of activity was 1,300 square feet.The company's owner budgets for supply costs,a variable cost,at $3.90 per square foot.The actual supply cost last month was $4,300.In the company's flexible budget performance report for last month,what would have been the spending variance for supply costs?

Roye 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 September, the kennel budgeted for 3,300 tenant-days, but its actual level of activity was 3,330 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for September: Data used in budgeting: Actual results for September: -The revenue variance for September would be closest to:

Farver 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 $44,420 per month plus $2,008 per flight plus $1 per passenger.The company expected its activity in May to be 80 flights and 281 passengers,but the actual activity was 81 flights and 277 passengers.The actual cost for plane operating costs in May was $199,650.The spending variance for plane operating costs in May would be closest to:

Yewston Hotel bases its budgets on guest-days. The hotel's static budget for April appears below: -The total variable cost at the activity level of 3,200 guest-days per month should be:

Voytek Corporation bases its budgets on the activity measure customers served.During October,the company planned to serve 36,000 customers,but actually served 34,000 customers.The company has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare a report showing the company's activity variances for October.Indicate in each case whether the variance is favorable (F)or unfavorable (U).

Zuehlke Urban Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for September was based on 2,800 meals,but the diner actually served 3,000 meals.The diner's director has provided the following cost data to use in the budget: groceries,$3.85 per meal;kitchen operations,$4,500 per month plus $1.65 per meal;administrative expenses,$3,300 per month plus $0.30 per meal;and fundraising expenses,$1,200 per month.The director has also provided the diner's statement of actual expenses for the month: Required: Prepare a report showing the activity variances for each of the expenses and for total expenses for September.

A spending variance is the difference between how much a cost should have been,given the actual level of activity,and the actual amount of the cost for the period.

Orscheln Snow Removal's cost formula for its vehicle operating cost is $2,800 per month plus $381 per snow-day.For the month of February,the company planned for activity of 17 snow-days,but the actual level of activity was 14 snow-days.The actual vehicle operating cost for the month was $7,920.The activity variance for vehicle operating cost in February would be closest to:

Mouton 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 7,300 units, but its actual level of activity was 7,350 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 manufacturing overhead in the flexible budget for July would be closest to:

Bamba Corporation's cost formula for its selling and administrative expense is $47,900 per month plus $52 per unit. For the month of April, the company planned for activity of 6,000 units, but the actual level of activity was 5,960 units. The actual selling and administrative expense for the month was $364,490. -The activity variance for selling and administrative expense in April would be closest to:

Kuramoto Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 7,600 units, but its actual level of activity was 7,560 units. The company has provided the following data concerning the formulas to be used in its budgeting: -The activity variance for direct labor in June would be closest to:

Cecere 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 1,740 students and 160 courses.The actual activity for the month was 1,540 students and 161 courses. Required: Prepare the school's planning budget for February.

A favorable spending variance occurs when the actual cost exceeds the amount of that cost in the flexible budget.

Hamp 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 3,000 tenant-days, but its actual level of activity was 3,050 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: -The net operating income in the planning budget for December would be closest to: