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 selling and administrative expenses in the planning budget for February would be closest to:

Buffaloe 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 5,200 units,but its actual level of activity was 5,250 units.The company has provided the following data concerning the formulas used in its budgeting and its actual results for August: -The direct labor in the planning budget for August would be closest to:

Portsche Snow Removal's cost formula for its vehicle operating cost is $2,310 per month plus $317 per snow-day.For the month of November,the company planned for activity of 18 snow-days,but the actual level of activity was 20 snow-days.The actual vehicle operating cost for the month was $8,730.The activity variance for vehicle operating cost in November would be closest to:

During August,Klinck Corporation plans to serve 33,000 customers.Revenue is $2.50 per customer served.Wages and salaries are $24,300 per month plus $0.90 per customer served.Supplies are $0.30 per customer served.Insurance is $7,100 per month.Miscellaneous expenses are $5,200 per month plus $0.10 per customer served. Required: Prepare the company's planning budget for August.

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

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

Spraque 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 $40,520 per month plus $2,733 per flight plus $11 per passenger.The company expected its activity in June to be 71 flights and 207 passengers,but the actual activity was 70 flights and 205 passengers.The actual cost for plane operating costs in June was $239,580. -The plane operating costs in the planning budget for June would be closest to:

Worden Hospital bases its budgets on patient-visits.The hospital's static budget for February appears below: -The total variable cost at the activity level of 4,400 patient-visits per month should be:

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 medical supplies in the flexible budget for December would be closest to:

Lutts 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 3,800 tenant-days,but its actual level of activity was 3,850 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 November 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 activity variance for administrative expenses in November would be closest to:

Guy Corporation uses customers served as its measure of activity.During January,the company budgeted for 32,000 customers,but actually served 35,000 customers.The company uses the following revenue and cost formulas in its budgeting,where q is the number of customers served: Revenue: $4.20q Wages and salaries: $33,900 + $1.40q Supplies: $0.60q Insurance: $10,000 Miscellaneous: $7,000 + $0.40q The company reported the following actual results for January: Required: Prepare the company's flexible budget performance report for January.Label each variance as favorable (F) or unfavorable (U).

Dwelmont Hotel bases its budgets on guest-days.The hotel's static budget for May appears below: -The total variable cost at the activity level of 2,600 guest-days per month should be:

A problem with directly comparing a static planning budget to actual costs is that this comparison fails to distinguish between differences in costs that are due to changes in activity and differences that are due to how well costs were controlled.

Karpin 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 July,the company budgeted for 434 guests and 132 jeeps.The actual activity for the month was 459 guests and 137 jeeps. Required: Prepare the company's flexible budget for the actual level of activity in July.

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 overall revenue and spending variance (i.e. ,the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for November would be closest to:

Smithson Clinic uses client-visits as its measure of activity.During May,the clinic budgeted for 3,300 client-visits,but its actual level of activity was 3,270 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for May: -The medical supplies in the flexible budget for May would be closest to:

Enriques 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 4,990 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 net operating income in February would be closest to:

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 net operating income in the flexible budget for April 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 net operating income in the planning budget for March would be closest to: