Exam 9: Flexible Budgets and Performance Analysis

Mieras Corporation uses customers served as its measure of activity.During January,the company budgeted for 37,000 customers,but actually served 36,000 customers.The company uses the following revenue and cost formulas in its budgeting,where q is the number of customers served: Revenue: $2.80q Wages and salaries: $22,800 + $0.90q Supplies: $0.50q Insurance: $7,500 Miscellaneous: $3,800 + $0.30q The company reported the following actual results for January: Required: Prepare a report showing the company's revenue and spending variances for January.Label each variance as favorable (F) or unfavorable (U).

Posson Catering uses two measures of activity,jobs and meals,in the cost formulas in its budgets and performance reports.The cost formula for catering supplies is $210 per month plus $96 per job plus $20 per meal.A typical job involves serving a number of meals to guests at a corporate function or at a host's home.The company expected its activity in March to be 20 jobs and 162 meals,but the actual activity was 17 jobs and 164 meals.The actual cost for catering supplies in March was $4,990.The spending variance for catering supplies in March would be closest to:

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 net operating income in the planning budget for September would be closest to:

Guilbault Midwifery's cost formula for its wages and salaries is $2,340 per month plus $154 per birth.For the month of June,the company planned for activity of 115 births,but the actual level of activity was 112 births.The actual wages and salaries for the month was $19,530.The wages and salaries in the planning budget for June would be closest to:

Witherington Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During June,the company budgeted for 7,800 units,but its actual level of activity was 7,850 units.The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: -The net operating income in the flexible budget for June would be closest to:

Manago Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During March,the company budgeted for 5,300 units,but its actual level of activity was 5,310 units.The company has provided the following data concerning the formulas to be used in its budgeting: -The selling and administrative expenses in the planning budget for March 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 spending variance for facility expenses in November would be closest to:

The revenue and spending variances are the differences between the static planning budget and the flexible budget.

Immen Corporation bases its budgets on the activity measure customers served.During May,the company planned to serve 38,000 customers.The company has provided the following data concerning the formulas it uses in its budgeting: The company has also furnished its income statement for May: Required: Prepare a report showing the company's activity variances for May.Indicate in each case whether the variance is favorable (F) or unfavorable (U).

Lauser Clinic uses client-visits as its measure of activity.During July,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 July: -The personnel expenses in the planning budget for July would be closest to:

Turiano Corporation bases its budgets on machine-hours.The company's static planning budget for November appears below: Required: Prepare a flexible budget for 9,800 machine-hours per month.

During May,Phong Clinic budgeted for 2,900 patient-visits,but its actual level of activity was 3,100 patient-visits.Revenue should be $31.30 per patient-visit.Personnel expenses should be $23,700 per month plus $8.10 per patient-visit.Medical supplies should be $700 per month plus $6.20 per patient-visit.Occupancy expenses should be $7,000 per month plus $1.50 per patient-visit.Administrative expenses should be $3,400 per month plus $0.40 per patient-visit. Required: Prepare the clinic's flexible budget for May based on the actual level of activity for the month.

Worden Hospital bases its budgets on patient-visits.The hospital's static budget for February appears below: -The total cost at the activity level of 4,600 patient-visits per month should be:

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:

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:

Vernon Clinic uses patient-visits as its measure of activity.During February,the clinic budgeted for 3,100 patient-visits,but its actual level of activity was 2,800 patient-visits.The clinic bases its budgets on the following information: Revenue should be $30.20 per patient-visit.Personnel expenses should be $20,600 per month plus $9.70 per patient-visit.Medical supplies should be $1,400 per month plus $5.40 per patient-visit.Occupancy expenses should be $5,700 per month plus $1.50 per patient-visit.Administrative expenses should be $2,500 per month plus $0.30 per patient-visit.The clinic reported the following actual results for February: Required: Prepare the clinic's flexible budget performance report 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 activity variance for wages and salaries in June would be closest to:

Hoeper Clinic uses client-visits as its measure of activity.During January,the clinic budgeted for 2,600 client-visits,but its actual level of activity was 2,570 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January: -The spending variance for medical supplies in January would be closest to:

Genito Corporation's static planning budget for October appears below.The company bases its budgets on machine-hours. In October,the actual number of machine-hours was 8,800,the actual supplies cost was $69,450,the actual power cost was $34,190,the actual salaries cost was $86,490,and the actual equipment depreciation was $37,600. -The spending variance for power cost in the flexible budget performance report for the month should be:

Flicker Urban Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for December was based on 2,400 meals,but the diner actually served 2,300 meals.The diner's director has provided the following cost data to use in the budget: groceries,$2.00 per meal;kitchen operations,$5,100 per month plus $1.85 per meal;administrative expenses,$2,900 per month plus $0.65 per meal;and fundraising expenses,$1,000 per month. Required: Prepare a report showing the activity variances for each of the expenses and for total expenses for December.Label each variance as favorable (F) or unfavorable (U).