Exam 2: Flexible Budgets and Performance Analysis

Bard Hotel bases its budgets on guest-days. The hotel's static budget for January appears below: -The total cost at the activity level of 10,300 guest-days per month should be:

Hagel Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 2,300 client-visits, but its actual level of activity was 2,320 client-visits. The clinic 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 spending variance for occupancy expenses in July would be closest to:

Cicchetti Corporation uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of December: Required: Prepare the company's flexible budget performance report for December. Label each variance as favorable (F) or unfavorable (U).

Olivera Corporation's flexible budget performance report for last month shows that actual indirect materials cost, a variable cost, was $31,178 and that the spending variance for indirect materials cost was $2,261 unfavorable. During that month, the company worked 11,900 machine-hours. Budgeted activity for the month had been 12,200 machine-hours. The cost formula per machine-hour for indirect materials cost must have been closest to:

A revenue variance is favorable if the actual revenue exceeds what the revenue should have been for the actual level of activity of the period.

Nicolini 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 2,200 tenant-days, but its actual level of activity was 2,250 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 food and supplies in the flexible budget for October would be closest to:

Carvana Clinic uses patient-visits as its measure of activity. During December, the clinic budgeted for 3,400 patient-visits, but its actual level of activity was 3,100 patient-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: Required: Prepare a report showing the clinic's revenue and spending variances for December. Label each variance as favorable (F) or unfavorable (U).

Illescas 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 6,400 units, but its actual level of activity was 6,440 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:

Miao Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 3,000 client-visits, but its actual level of activity was 2,980 client-visits. The clinic 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 occupancy expenses in the flexible budget for July would be closest to:

Dehnert Midwifery's cost formula for its wages and salaries is $2,030 per month plus $409 per birth. For the month of May, the company planned for activity of 112 births, but the actual level of activity was 114 births. The actual wages and salaries for the month was $50,800. The wages and salaries in the planning budget for May would be closest to:

Sorrow 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 2,300 tenant-days, but its actual level of activity was 2,350 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 activity variance for wages and salaries in November would be closest to:

Prater 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 5,400 units, but its actual level of activity was 5,380 units. The company 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 manufacturing overhead in the flexible budget for February would be closest to:

Poljak 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 1,970 students and 137 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 February. Label each variance as favorable (F) or unfavorable (U).

Zenon 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 July, the kennel budgeted for 3,300 tenant-days, but its actual level of activity was 3,260 tenant-days. The kennel 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 facility expenses in the flexible budget for July would be closest to:

Zelenka Clinic uses client-visits as its measure of activity. During June, the clinic budgeted for 2,700 client-visits, but its actual level of activity was 2,710 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for June: -The net operating income in the planning budget for June would be closest to:

Leaphart 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 2,800 tenant-days, but its actual level of activity was 2,840 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 May would be closest to:

Toadvine Clinic uses patient-visits as its measure of activity. During April, the clinic budgeted for 3,800 patient-visits, but its actual level of activity was 3,400 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits: Revenue: $39.70q Personnel expenses: $38,700 + $11.50q Medical supplies: $1,000 + $7.30q Occupancy expenses: $11,700 + $1.30q Administrative expenses: $6,700 + $0.30q The clinic reported the following actual results for April: Required: Prepare a report showing the clinic's revenue and spending variances for April. Label each variance as favorable (F) or unfavorable (U).

A spending variance is the difference between the cost in the static planning budget and the actual amount of the cost for the period.

Krejci 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 $41,430 per month plus $2,419 per flight plus $6 per passenger. The company expected its activity in March to be 84 flights and 222 passengers, but the actual activity was 81 flights and 220 passengers. The actual cost for plane operating costs in March was $239,870. The plane operating costs in the planning budget for March would be closest to:

Glassing Clinic uses client-visits as its measure of activity. During September, 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 to be used in its budgeting: -The activity variance for net operating income in September would be closest to: