Exam 9: Flexible Budgets and Performance Analysis

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 spending variance for manufacturing overhead in March 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 selling and administrative expenses in February would be closest to:

Entler Framing's cost formula for its supplies cost is $2,250 per month plus $16 per frame.For the month of June,the company planned for activity of 502 frames,but the actual level of activity was 497 frames.The actual supplies cost for the month was $10,580.The supplies cost in the planning budget for June would be closest to:

Springmeyer Clinic uses client-visits as its measure of activity.During August,the clinic budgeted for 2,900 client-visits,but its actual level of activity was 2,940 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for August: -The personnel expenses in the planning budget for August would be closest to:

Ofarrell Snow Removal's cost formula for its vehicle operating cost is $1,840 per month plus $377 per snow-day.For the month of November,the company planned for activity of 14 snow-days,but the actual level of activity was 19 snow-days.The actual vehicle operating cost for the month was $9,280.The vehicle operating cost in the flexible budget for November 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 medical supplies in the flexible budget for January would be closest to:

During September,Noaks Clinic plans for an activity level of 3,300 patient-visits.The clinic uses the following revenue and cost formulas in its budgeting,where q is the number of patient-visits: Revenue: $30.50q Personnel expenses: $30,900 + $8.40q Medical supplies: $1,200 + $4.50q Occupancy expenses: $6,400 + $1.70q Administrative expenses: $3,700 + $0.10q Required: Prepare the clinic's planning budget for September.

Werber Clinic uses client-visits as its measure of activity.During January,the clinic budgeted for 2,700 client-visits,but its actual level of activity was 2,730 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January: -The activity variance for net operating income in January would be closest to:

A static planning budget is suitable for planning and for evaluating how well costs are controlled.

Kalinowski 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 2,300 tenant-days,but its actual level of activity was 2,320 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February: -The net operating income in the flexible budget for February would be closest to:

Garing Urban Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for March was based on 3,600 meals.The diner's director has provided the following cost data to use in the budget: groceries,$2.20 per meal;kitchen operations,$4,300 per month plus $1.90 per meal;administrative expenses,$3,300 per month plus $0.20 per meal;and fundraising expenses,$1,000 per month.The director has also provided the diner's statement of actual expenses for the month: Required: Prepare a report showing the diner's spending variances for each of the expenses and for total expenses for March.Label each variance as favorable (F) or unfavorable (U).

Menson 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 5,800 units,but its actual level of activity was 5,830 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 December 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 facility expenses in the flexible budget for March would be closest to:

When the activity measure is the number of units sold,the revenue variance is unfavorable if the average actual selling price is less than expected.

Embertson Framing's cost formula for its supplies cost is $1,350 per month plus $16 per frame.For the month of June,the company planned for activity of 816 frames,but the actual level of activity was 812 frames.The actual supplies cost for the month was $14,680.The activity variance for supplies cost in June would be closest to:

An unfavorable activity variance for a cost indicates that spending was higher than it should have been for the actual level of activity for the period.

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 direct labor in the planning budget for June would be closest to:

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

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 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 May 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 occupancy expenses in the flexible budget for March would be closest to: