Question 1

The administrative expenses in the planning budget for September would be closest to:

Accepted Answer

A) $6,480 
B) $6,405 
C) $6,293 
D) $6,485

Question 2

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

Accepted Answer

A) $19,149 
B) $19,395 
C) $19,990 
D) $19,010

Question 3

The spending variance for facility expenses in September would be closest to:

Accepted Answer

A) $290 F 
B) $191 U 
C) $290 U 
D) $191 F

Question 4

Lantto 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 $34,810 per month plus $2,850 per flight plus $12 per passenger. The company expected its activity in June to be 70 flights and 292 passengers, but the actual activity was 69 flights and 291 passengers. The actual cost for plane operating costs in June was $236,550. The plane operating costs in the flexible budget for June would be closest to:

Accepted Answer

A) $237,814 
B) $234,952 
C) $236,550 
D) $234,417

Question 5

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

Accepted Answer

A) $32,340 
B) $32,378 
C) $32,120 
D) $32,600

Question 6

A static budget:

Accepted Answer

A) should be compared to actual costs to assess how well costs were controlled. 
B) should be compared to a flexible budget to assess how well costs were controlled. 
C) is valid for only one level of activity. 
D) represents the best way to set spending targets for managers.

Question 7

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:

Accepted Answer

A) $230 F 
B) $1,200 U 
C) $1,200 F 
D) $230 U

Question 8

Schlick Framing's cost formula for its supplies cost is $1,770 per month plus $12 per frame. For the month of August, the company planned for activity of 628 frames, but the actual level of activity was 631 frames. The actual supplies cost for the month was $9,790. The activity variance for supplies cost in August would be closest to:

Accepted Answer

A) $36 F 
B) $484 F 
C) $484 U 
D) $36 U

Question 9

Dreyfus Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for April was based on 2,100 meals. The diner's director has provided the following cost formulas to use in budgets:  The director has also provided the diner's statement of actual expenses for the month:  Required:
Prepare a flexible budget performance report showing both the activity variances and the spending variances for each of the expenses and for total expenses for April. Label each variance as favorable (F) or unfavorable (U).

Accepted Answer

The answer of Dreyfus Memorial Diner is a charity supported...

Question 10

Brayboy Tile Installation Corporation measures its activity in terms of square feet of tile installed. Last month, the budgeted level of activity was 1,360 square feet and the actual level of activity was 1,300 square feet. The company's owner budgets for supply costs, a variable cost, at $3.90 per square foot. The actual supply cost last month was $4,300. In the company's flexible budget performance report for last month, what would have been the spending variance for supply costs?

Accepted Answer

A) $770 F 
B) $1,004 F 
C) $198 F 
D) $234 F

Question 11

Brandewie Corporation bases its budgets on the activity measure customers served. During May, the company planned to serve 38,000 customers, but actually served 33,000 customers. Revenue is $2.80 per customer served. Wages and salaries are $28,800 per month plus $0.80 per customer served. Supplies are $0.50 per customer served. Insurance is $6,800 per month. Miscellaneous expenses are $5,800 per month plus $0.30 per customer served.
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).

Accepted Answer

The answer of Brandewie Corporation bases its budgets on the...

Question 12

Tajiri Corporation uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of May:  Required:
Prepare the company's flexible budget performance report for May. Label each variance as favorable (F) or unfavorable (U).

Accepted Answer

The answer of Tajiri Corporation uses customers served as its...

Question 13

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

Accepted Answer

A) $23,960 
B) $24,690 
C) $24,628 
D) $23,950

Question 14

When a flexible budget is used in performance evaluation, actual costs are compared to what the costs should have been for the actual level of activity during the period rather than to the static planning budget.

Accepted Answer

A) True 
 B)False

Question 15

The spending variance for medical supplies in May would be closest to:

Accepted Answer

A) $200 F 
B) $200 U 
C) $195 F 
D) $195 U

Question 16

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

Accepted Answer

A) $8,404 
B) $17,880 
C) $16,820 
D) $8,678

Question 17

The revenue variance for June would be closest to:

Accepted Answer

A) $3,556 U 
B) $4,960 F 
C) $3,556 F 
D) $4,960 U

Question 18

The spending variance for occupancy expenses in May would be closest to:

Accepted Answer

A) $135 U 
B) $135 F 
C) $80 U 
D) $80 F

Question 19

The spending variance for materials and supplies in November would be closest to:

Accepted Answer

A) $34 F 
B) $286 F 
C) $34 U 
D) $286 U

Question 20

The spending variance for occupancy expenses in May would be closest to:

Accepted Answer

A) $710 U 
B) $710 F 
C) $629 F 
D) $629 U

Exam 11: Flexible Budgets and Performance Analysis

The administrative expenses in the planning budget for September would be closest to:

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

The spending variance for facility expenses in September would be closest to:

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

A static budget:

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:

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

When a flexible budget is used in performance evaluation, actual costs are compared to what the costs should have been for the actual level of activity during the period rather than to the static planning budget.

The spending variance for medical supplies in May would be closest to:

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

The revenue variance for June would be closest to:

The spending variance for occupancy expenses in May would be closest to:

The spending variance for materials and supplies in November would be closest to:

The spending variance for occupancy expenses in May would be closest to: