Exam 9: Flexible Budgets and Performance Analysis

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 net operating income in the flexible budget for August would be closest to:

Cotty Clinic uses client-visits as its measure of activity.During March,the clinic budgeted for 3,000 client-visits,but its actual level of activity was 2,970 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for March: -The spending variance for medical supplies in March would be closest to:

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:

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:

Moorhouse Clinic uses client-visits as its measure of activity.During December,the clinic budgeted for 3,700 client-visits,but its actual level of activity was 3,690 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December: -The activity variance for personnel expenses in December would be closest to:

Korando Urban Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for June is to be based on 2,900 meals.The diner's director has provided the following cost data to use in the budget: groceries,$2.60 per meal;kitchen operations,$4,200 per month plus $1.15 per meal;administrative expenses,$2,800 per month plus $0.65 per meal;and fundraising expenses,$1,000 per month. Required: Prepare the diner's budget for the month of June.The budget will only contain the costs listed above;no revenues will be on the budget.

Salling Corporation bases its budgets on machine-hours.The company's static planning budget for May appears below: -The spending variance for power costs in the flexible budget performance report for the month should be:

Kuczenski Corporation's cost formula for its manufacturing overhead is $45,700 per month plus $53 per machine-hour.For the month of March,the company planned for activity of 6,200 machine-hours,but the actual level of activity was 6,150 machine-hours.The actual manufacturing overhead for the month was $373,630. -The manufacturing overhead in the flexible budget for March would be closest to:

Bessey Hospital bases its budgets on patient-visits.The hospital's static planning budget for January appears below: -The spending variance for laundry costs in the flexible budget performance report for the month is:

Grundhoefer 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 April,the kennel budgeted for 2,000 tenant-days,but its actual level of activity was 1,990 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for April: -The activity variance for wages and salaries in April would be closest to:

Cotty Clinic uses client-visits as its measure of activity.During March,the clinic budgeted for 3,000 client-visits,but its actual level of activity was 2,970 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for March: -The activity variance for administrative expenses in March would be closest to:

Brink 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 June,the school budgeted for 1,710 students and 110 courses.The school's income statement showing the actual results for the month appears below: Required: Prepare a flexible budget performance report showing both the school's activity variances and revenue and spending variances for June.Label each variance as favorable (F) or unfavorable (U).

Whetstine 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 3,200 tenant-days,but its actual level of activity was 3,180 tenant-days.The kennel has provided the following data concerning the formulas to be used in its budgeting: -The net operating income in the flexible budget for September would be closest to:

Rippelmeyer 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 3,600 tenant-days,but its actual level of activity was 3,550 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for June: -The expendables in the flexible budget for June would be closest to:

Lauter Printing uses two measures of activity,press runs and book set-ups,in the cost formulas in its budgets and performance reports.The cost formula for wages and salaries is $5,300 per month plus $480 per press run plus $1,080 per book set-up.The company expected its activity in October to be 169 press runs and 64 book set-ups,but the actual activity was 167 press runs and 60 book set-ups.The actual cost for wages and salaries in October was $155,690. -The activity variance for wages and salaries in October would be closest to:

Baugus 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 6,900 units,but its actual level of activity was 6,950 units.The company has provided the following data concerning the formulas used in its budgeting and its actual results for August: -The revenue variance for August would be closest to:

Vilanova Memorial Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for May 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 May.The budget will only contain the costs listed above;no revenues will be on the budget.

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).

Laboe 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 2,900 tenant-days,but its actual level of activity was 2,940 tenant-days.The kennel has provided the following data concerning the formulas to be used in its budgeting: -The expendables in the flexible budget for February would be closest to:

Razor 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 3,000 tenant-days,but its actual level of activity was 3,010 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for November: -The revenue variance for November would be closest to: