Exam 9: Flexible Budgets and Performance Analysis

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 direct materials in the flexible budget for February would be closest to:

Henkel Clinic uses client-visits as its measure of activity.During November,the clinic budgeted for 3,600 client-visits,but its actual level of activity was 3,550 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November: -The spending variance for occupancy expenses in November would be closest to:

Olivier Framing's cost formula for its supplies cost is $2,870 per month plus $16 per frame.For the month of January,the company planned for activity of 533 frames,but the actual level of activity was 534 frames.The actual supplies cost for the month was $11,080.The spending variance for supplies cost in January would be closest to:

Ahrns 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 1,770 students and 148 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 July.Label each variance as favorable (F) or unfavorable (U).

Pollica Corporation's cost formula for its selling and administrative expense is $11,400 per month plus $94 per unit.For the month of March,the company planned for activity of 5,700 units,but the actual level of activity was 5,660 units.The actual selling and administrative expense for the month was $522,860. -The selling and administrative expense in the flexible budget for March would be closest to:

Brynteson Corporation bases its budgets on the activity measure customers served.During September,the company planned to serve 24,000 customers,but actually served 19,000 customers.The company uses the following revenue and cost formulas in its budgeting,where q is the number of customers served: Revenue: $2.90q Wages and salaries: $24,700 + $0.90q Supplies: $0.40q Insurance: $4,900 Miscellaneous: $2,800 + $0.10q Required: Prepare a report showing the company's activity variances for September.Indicate in each case whether the variance is favorable (F) or unfavorable (U).

Feiner Clinic uses client-visits as its measure of activity.During December,the clinic budgeted for 2,200 client-visits,but its actual level of activity was 2,220 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 December would be closest to:

Worden Hospital bases its budgets on patient-visits.The hospital's static budget for February appears below: -The total fixed cost at the activity level of 4,700 patient-visits per month should be:

Ruvolo 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 February,the company budgeted for 436 guests and 162 jeeps.The company's income statement showing the actual results for the month appears below: Required: Prepare a report showing the company's revenue and spending variances for February.Label each variance as favorable (F) or unfavorable (U).

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 spending variance for expendables in June would be closest to:

Which of the following comparisons best isolates the impact that changes in prices of inputs and outputs have on performance?

If the actual level of activity is 4% less than planned,then the costs in the static budget should be reduced by 4% before comparing them to actual costs.

Jauron 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 2,300 tenant-days,but its actual level of activity was 2,310 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for September: -The administrative expenses in the planning budget for September 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:

Swader 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 2,900 tenant-days,but its actual level of activity was 2,930 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: -The expendables in the flexible budget for March would be closest to:

Henkel Clinic uses client-visits as its measure of activity.During November,the clinic budgeted for 3,600 client-visits,but its actual level of activity was 3,550 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November: -The personnel expenses in the planning budget for November would be closest to:

Legard 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 January,the kennel budgeted for 2,600 tenant-days,but its actual level of activity was 2,620 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for January: -The revenue variance for January would be closest to:

Gorley 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 3,900 tenant-days,but its actual level of activity was 3,940 tenant-days.The kennel has provided the following data concerning the formulas to be used in its budgeting: -The activity variance for administrative expenses in February would be closest to:

Delamarter Clinic bases its budgets on the activity measure patient-visits.During June,the clinic planned for 2,600 patient-visits,but its actual level of activity was 3,100 patient-visits.Revenue should be $53.40 per patient-visit.Personnel expenses should be $39,700 per month plus $12.60 per patient-visit.Medical supplies should be $1,800 per month plus $10.40 per patient-visit.Occupancy expenses should be $8,200 per month plus $2.30 per patient-visit.Administrative expenses should be $6,100 per month plus $0.20 per patient-visit. Required: Prepare a report showing the clinic's activity variances for June.Indicate in each case whether the variance is favorable (F) or unfavorable (U).

Niforos 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 $41,380 per month plus $2,282 per flight plus $14 per passenger.The company expected its activity in August to be 77 flights and 264 passengers,but the actual activity was 78 flights and 261 passengers.The actual cost for plane operating costs in August was $216,740.The plane operating costs in the flexible budget for August would be closest to: