Exam 2: Flexible Budgets and Performance Analysis

Ruetz Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,520 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: -The medical supplies in the flexible budget for November would be closest to:

Stitt Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During November, the company budgeted for 5,900 units, but its actual level of activity was 5,880 units. The company 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 direct labor in the planning budget for November would be closest to:

Randt Footwear Corporation's flexible budget cost formula for supplies, a variable cost, is $2.79 per unit of output. The company's flexible budget performance report for last month showed a $5,363 favorable spending variance for supplies. During that month, 17,300 units were produced. Budgeted activity for the month had been 17,200 units. The actual cost per unit for indirect materials must have been closest to:

When a flexible budget is used in performance evaluation, actual costs are compared to the static planning budget rather than to what the costs should have been for the actual level of activity during the period.

Jiminian Clinic uses client-visits as its measure of activity. During March, the clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,660 client-visits. The clinic 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 medical supplies in the flexible budget for March would be closest to:

Wesolick 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 2,870 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 administrative expenses in the planning budget for August would be closest to:

Perla 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 2,200 tenant-days, but its actual level of activity was 2,160 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 revenue variance for March would be closest to:

Lineback Corporation bases its budgets on the activity measure customers served. During April, the company planned to serve 33,000 customers, but actually served 30,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $2.60q Wages and salaries: $26,000 + $0.70q Supplies: $0.50q Insurance: $5,400 Miscellaneous expense: $2,700 + $0.20q Required: Prepare a report showing the company's activity variances for April. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

Wales 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 February, the kennel budgeted for 2,700 tenant-days, but its actual level of activity was 2,730 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: -The administrative expenses in the planning budget for February would be closest to:

Smithj 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 February, the kennel budgeted for 3,500 tenant-days, but its actual level of activity was 3,490 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting: Actual results for February: -The revenue variance for February would be closest to:

Liscomb 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 October, the school budgeted for 1,520 students and 113 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 October. Label each variance as favorable (F) or unfavorable (U).

Stitt Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During November, the company budgeted for 5,900 units, but its actual level of activity was 5,880 units. The company 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 activity variance for selling and administrative expenses in November would be closest to:

Ordway 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 2,100 tenant-days, but its actual level of activity was 2,070 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 facility expenses in the flexible budget for June would be closest to:

Privett Hospital bases its budgets on patient-visits. The hospital's static planning budget for November appears below: Actual results for the month were: -The revenue variance for April would be closest to:

Camcam Corporation uses customers served as its measure of activity. During July, the company budgeted for 26,000 customers, but actually served 30,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $4.90q Wages and salaries: $34,400 + $1.60q Supplies: $1.00q Insurance: $8,500 Miscellaneous expense: $5,600 + $0.20q The company reported the following actual results for July: Required: Prepare the company's flexible budget performance report for July. Label each variance as favorable (F) or unfavorable (U).

Ohme Framing's cost formula for its supplies cost is $1,620 per month plus $13 per frame. For the month of April, the company planned for activity of 882 frames, but the actual level of activity was 878 frames. The actual supplies cost for the month was $13,500. The supplies cost in the flexible budget for April would be closest to:

Akey Hospital bases its budgets on patient-visits. The hospital's static budget for March appears below: The total overhead cost at an activity level of 3,000 patient-visits per month should be:

Dancause 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 5,100 units, but its actual level of activity was 5,090 units. The company has provided the following data concerning the formulas to be used in its budgeting: -The manufacturing overhead in the flexible budget for October would be closest to:

Perla 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 2,200 tenant-days, but its actual level of activity was 2,160 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 food and supplies in the flexible budget for March would be closest to:

The activity variance for revenue is unfavorable if the actual level of activity for the period is less than the planned level of activity.