Exam 8: Flexible Budgets and Performance Analysis

Fixed costs should not be included in a performance report because fixed costs are not controllable.

Gradert Framing's cost formula for its supplies cost is $1,540 per month plus $12 per frame.For the month of September,the company planned for activity of 668 frames,but the actual level of activity was 666 frames.The actual supplies cost for the month was $9,980.The supplies cost in the planning budget for September would be closest to:

Tervo Jeep Tours operates jeep tours in the heart of the Colorado Rockies.The company bases its budgets on two measures of activity (i.e. ,cost drivers),namely guests and jeeps.One vehicle used in one tour on one day counts as a jeep.Each jeep has one tour guide.The company uses the following data in its budgeting: In March,the company budgeted for 492 guests and 165 jeeps.The company's income statement showing the actual results for the month appears below: Required: Prepare a flexible budget performance report showing both the company's activity variances and revenue and spending variances for March.Label each variance as favorable (F)or unfavorable (U).

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 spending variance for expendables in September would be closest to:

Burau Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During January, the company budgeted for 5,500 units, but its actual level of activity was 5,510 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting: Actual results for January: -The activity variance for selling and administrative expenses in January 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 cleaning equipment and supplies in the planning budget for June would be closest to:

Heitkamp 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 July,the school budgeted for 1,530 students and 58 courses.The school's income statement showing the actual results for the month appears below: Required: Prepare a report showing the school's activity variances for July.Label each variance as favorable (F)or unfavorable (U).

During February,Poetker Corporation budgeted for 29,000 customers,but actually served 28,000 customers.Revenue should be $4.70 per customer served.Wages and salaries should be $31,700 per month plus $1.50 per customer served.Supplies should be $0.80 per customer served.Insurance should be $8,400 per month.Miscellaneous expenses should be $7,400 per month plus $0.40 per customer served. Required: Prepare the company's flexible budget for February based on the actual level of activity for the month.

Gourley Clinic uses client-visits as its measure of activity. During August, the clinic budgeted for 3,200 client-visits, but its actual level of activity was 3,160 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: -The activity variance for administrative expenses in August would be closest to:

Rizza 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 April,the school budgeted for 1,350 students and 45 courses.The school's income statement showing the actual results for the month appears below: Required: Prepare a report showing the school's revenue and spending variances for April.Label each variance as favorable (F)or unfavorable (U).

Lotson Corporation bases its budgets on machine-hours. The company's static planning budget for May appears below: Actual results for the month were: -The spending variance for equipment depreciation in the flexible budget performance report for the month should be:

Nakhle 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 October, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was 2,960 tenant-days. The kennel 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 wages and salaries in the planning budget for October would be closest to:

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 selling and administrative expenses in the planning budget for October 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 selling and administrative expense in the flexible budget for April would be closest to:

A static budget:

During October,Keliihoomalu Clinic budgeted for 2,700 patient-visits,but its actual level of activity was 2,200 patient-visits.Revenue should be $27.30 per patient-visit.Personnel expenses should be $21,100 per month plus $6.80 per patient-visit.Medical supplies should be $500 per month plus $4.90 per patient-visit.Occupancy expenses should be $5,700 per month plus $0.90 per patient-visit.Administrative expenses should be $3,700 per month plus $0.40 per patient-visit. Required: Prepare the clinic's flexible budget for October based on the actual level of activity for the month.

Nield Jeep Tours operates jeep tours in the heart of the Colorado Rockies.The company bases its budgets on two measures of activity (i.e. ,cost drivers),namely guests and jeeps.One vehicle used in one tour on one day counts as a jeep.Each jeep has one tour guide.The company uses the following data in its budgeting: In July,the company budgeted for 430 guests and 210 jeeps.The actual activity for the month was 415 guests and 205 jeeps. Required: Prepare a report showing the company's activity variances for July.Label each variance as favorable (F)or unfavorable (U).

Parisi Clinic uses client-visits as its measure of activity. During March, the clinic budgeted for 2,300 client-visits, but its actual level of activity was 2,350 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: -The occupancy expenses in the flexible budget for March would be closest to:

Vera Corporation bases its budgets on the activity measure customers served.During September,the company planned to serve 28,000 customers,but actually served 27,000 customers.The company has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare the company's flexible budget for September based on the actual level of activity for the month.

Hernande Urban Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for October was based on 2,800 meals.The diner's director has provided the following cost data to use in the budget: groceries,$2.45 per meal;kitchen operations,$5,200 per month plus $1.70 per meal;administrative expenses,$2,600 per month plus $0.65 per meal;and fundraising expenses,$1,100 per month.The director has also provided the diner's statement of actual expenses for the month: Required: Prepare a report showing the diner's spending variances for each of the expenses and for total expenses for October.Label each variance as favorable (F)or unfavorable (U).