Exam 9: Flexible Budgets and Performance Analysis

Mashore 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 April,the company budgeted for 495 guests and 187 jeeps.The company's income statement showing the actual results for the month appears below: Required: Prepare a report showing the company's activity variances for April.Label each variance as favorable (F) or unfavorable (U).

A flexible budget is a budget that:

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 facility expenses in the flexible budget for September would be closest to:

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 administrative expenses in December would be closest to:

Kaaihue Detailing's cost formula for its materials and supplies is $2,750 per month plus $17 per vehicle.For the month of April,the company planned for activity of 95 vehicles,but the actual level of activity was 135 vehicles.The actual materials and supplies for the month was $4,850. -The materials and supplies in the planning budget for April would be closest to:

Dwelmont Hotel bases its budgets on guest-days.The hotel's static budget for May appears below: -The total cost at the activity level of 2,800 guest-days per month should be:

The activity variance for revenue is unfavorable if the actual revenue for the period is less than the revenue in the static planning budget.

Fuquay Corporation uses customers served as its measure of activity.The company bases its budgets on the following information: Revenue should be $4.80 per customer served.Wages and salaries should be $26,500 per month plus $1.70 per customer served.Supplies should be $0.90 per customer served.Insurance should be $7,100 per month.Miscellaneous expenses should be $4,700 per month plus $0.20 per customer served. The company reported the following actual results for May: Required: Prepare a report showing the company's revenue and spending variances for May.Label each variance as favorable (F) or unfavorable (U).

Velten Corporation's flexible budget performance report for last month shows that actual indirect materials cost,a variable cost,was $45,198 and that the spending variance for indirect materials cost was $9,114 favorable.During that month,the company worked 18,600 machine-hours.Budgeted activity for the month had been 19,000 machine-hours.The cost formula per machine-hour for indirect materials cost must have been closest to:

Salvia Urban Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for May was based on 3,400 meals,but the diner actually served 3,700 meals.The diner's director has provided the following cost data to use in the budget: groceries,$2.90 per meal;kitchen operations,$4,100 per month plus $1.90 per meal;administrative expenses,$2,400 per month plus $0.20 per meal;and fundraising expenses,$1,000 per month. Required: Prepare the diner's flexible budget for the actual number of meals served in May.The budget will only contain the costs listed above;no revenues will be on the budget.

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 spending variance for wages and salaries in October 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 administrative expenses in the planning budget for March would be closest to:

Burget Clinic uses client-visits as its measure of activity.During July,the clinic budgeted for 2,100 client-visits,but its actual level of activity was 2,110 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for July: -The revenue variance for July 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 occupancy expenses in the flexible budget for November would be closest to:

Thews Clinic uses patient-visits as its measure of activity.During August,the clinic budgeted for 2,000 patient-visits,but its actual level of activity was 2,200 patient-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for August: Required: Prepare the clinic's flexible budget performance report for August.Label each variance as favorable (F) or unfavorable (U).

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 spending variance for plane operating costs in June would be closest to:

Burget Clinic uses client-visits as its measure of activity.During July,the clinic budgeted for 2,100 client-visits,but its actual level of activity was 2,110 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for July: -The spending variance for occupancy expenses in July would be closest to:

Palczewski 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 5,000 units,but its actual level of activity was 4,980 units.The company has provided the following data concerning the formulas to be used in its budgeting: -The activity variance for selling and administrative expenses in December 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 wages and salaries in the planning budget for September would be closest to:

Stent 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 3,000 tenant-days,but its actual level of activity was 2,950 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February: -The wages and salaries in the planning budget for February would be closest to: