Exam 10: Flexible Budgets and Performance Analysis

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

Poulsen 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 7,270 units. The company has provided the following data concerning the formulas to be used in its budgeting: -The net operating income in the flexible budget for July would be closest to:

Woofter 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 7,600 units, but its actual level of activity was 7,560 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for January: -The net operating income in the flexible budget for January would be closest to:

Murphree Clinic uses client-visits as its measure of activity. During April, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,350 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for April: -The net operating income in the flexible budget for April would be closest to:

Nasson 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 6,700 units, but its actual level of activity was 6,730 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for August: -The manufacturing overhead in the flexible budget for August would be closest to:

It may be easier to control fixed costs than variable costs.

Spraque 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 $40,520 per month plus $2,733 per flight plus $11 per passenger. The company expected its activity in June to be 71 flights and 207 passengers, but the actual activity was 70 flights and 205 passengers. The actual cost for plane operating costs in June was $239,580. -The plane operating costs in the planning budget for June would be closest to:

Menson Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During December, the company budgeted for 5,800 units, but its actual level of activity was 5,830 units. The company has provided the following data concerning the formulas to be used in its budgeting: -The direct labor in the planning budget for December would be closest to:

Tosta 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 2,100 tenant-days, but its actual level of activity was 2,050 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May: -The activity variance for net operating income in May would be closest to:

Cotillo Corporation uses customers served as its measure of activity. During December, the company budgeted for 29,000 customers, but actually served 27,000 customers. The company bases its budgets on the following information: Revenue should be $4.40 per customer served. Wages and salaries should be $33,300 per month plus $1.80 per customer served. Supplies should be $0.60 per customer served. Insurance should be $8,900 per month. Miscellaneous expenses should be $4,600 per month plus $0.10 per customer served. The company reported the following actual results for December: Required: Prepare the company's flexible budget performance report for December. Label each variance as favorable (F) or unfavorable (U).

Luc 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 5,000 units, but its actual level of activity was 4,950 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for February: -The activity variance for direct labor in February would be closest to:

Portsche Snow Removal's cost formula for its vehicle operating cost is $2,310 per month plus $317 per snow-day. For the month of November, the company planned for activity of 18 snow-days, but the actual level of activity was 20 snow-days. The actual vehicle operating cost for the month was $8,730. The activity variance for vehicle operating cost in November would be closest to:

Novielli Corporation bases its budgets on the activity measure customers served. During November, the company planned to serve 39,000 customers, but actually served 44,000 customers. The company has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare the company's flexible budget for November based on the actual level of activity for the month.

Mah Clinic uses client-visits as its measure of activity. During April, the clinic budgeted for 3,800 client-visits, but its actual level of activity was 3,750 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 April would be closest to:

Vandall 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 7,300 units, but its actual level of activity was 7,340 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for April: -The revenue variance for April would be closest to:

Springmeyer Clinic uses client-visits as its measure of activity. During August, the clinic budgeted for 2,900 client-visits, but its actual level of activity was 2,940 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for August: -The net operating income in the planning budget for August would be closest to:

Hasselman 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 January, the school budgeted for 1,110 students and 105 courses. The actual activity for the month was 1,210 students and 103 courses. Required: Prepare the school's flexible budget for the actual level of activity in January.

Vandall 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 7,300 units, but its actual level of activity was 7,340 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for April: -The spending variance for manufacturing overhead in April would be closest to:

During September, Booker Corporation budgeted for 20,000 customers, but actually served 22,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $5.50q Wages and salaries: $28,300 + $1.70q Supplies: $1.00q Insurance: $6,300 Miscellaneous: $5,400 + $0.40q Required: Prepare the company's flexible budget for September based on the actual level of activity for the month.

Tosta 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 2,100 tenant-days, but its actual level of activity was 2,050 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May: -The net operating income in the planning budget for May would be closest to: