Exam 9: Flexible Budgets and Performance Analysis

Stegemann Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for May. When the company prepared its planning budget at the beginning of May, it assumed that 27 containers would have been refurbished. However, 29 containers were actually refurbished during May. -The revenue in the company's flexible budget for May would have been closest to:

Benjamin Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. When the company prepared its planning budget at the beginning of March, it assumed that 26 containers would have been refurbished. However, 23 containers were actually refurbished during March. -The amount shown for net operating income in the planning budget for March would have been closest to:

Bartosiewicz Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 3,500 client-visits, but its actual level of activity was 3,490 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting: Actual results for January: -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 January would be closest to:

During October,Fryer Corporation budgeted for 30,000 customers,but actually served 33,000 customers.Revenue should be $2.90 per customer served.Wages and salaries should be $27,200 per month plus $0.80 per customer served.Supplies should be $0.60 per customer served.Insurance should be $6,700 per month.Miscellaneous expenses should be $3,100 per month plus $0.10 per customer served. Required: Prepare the company's flexible budget for October based on the actual level of activity for the month.

Neubert 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 5,300 units, but its actual level of activity was 5,340 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting: Actual results for December: -The net operating income in the flexible budget for December would be closest to:

Korsak Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. The planning budget for October was based on serving 23 customers, but a A total of 19 customers were actually served during October. The Planning budget units is missing and affects the calculations of the subsequent questions. -The activity variance for "Other expenses" for October would have been closest to:

Mandalay Hotel bases its budgets on guest-days. The hotel's static budget for August appears below: -The total fixed cost at the activity level of 5,500 guest-days per month should be:

Rogstad 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 6,700 units, but its actual level of activity was 6,670 units. The company has provided the following data concerning the formulas to be used in its budgeting: -The activity variance for net operating income in March would be closest to:

Leist Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,170 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 September would be closest to:

Courington Detailing's cost formula for its materials and supplies is $2,420 per month plus $9 per vehicle. For the month of August, the company planned for activity of 63 vehicles, but the actual level of activity was 33 vehicles. The actual materials and supplies for the month was $2,840. Why such a great disparity between the planned and actual level of activity from 63 to 33 vehicles - should these be closer together? Please keep as is. -The activity variance for materials and supplies in August would be closest to:

Hallet Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, 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 used in its budgeting and its actual results for May: Data used in budgeting: Actual results for May: -The selling and administrative expenses in the planning budget for May would be closest to:

Poling Clinic bases its budgets on the activity measure patient-visits.During July,the clinic planned for 3,600 patient-visits,but its actual level of activity was 4,000 patient-visits.Revenue should be $30.40 per patient-visit.Personnel expenses should be $30,000 per month plus $9.30 per patient-visit.Medical supplies should be $1,000 per month plus $3.70 per patient-visit.Occupancy expenses should be $9,300 per month plus $0.80 per patient-visit.Administrative expenses should be $4,300 per month plus $0.30 per patient-visit. Required: Prepare a report showing the clinic's activity variances for July.Indicate in each case whether the variance is favorable (F)or unfavorable (U).

-The activity variance for total expenses for August would have been closest to:

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

Ginnings Corporation bases its budgets on the activity measure customers served.During May,the company planned to serve 38,000 customers,but actually served 37,000 customers.The company uses the following revenue and cost formulas in its budgeting,where q is the number of customers served: Revenue: $2.90q Wages and salaries: $37,200 + $0.80q Supplies: $0.40q Insurance: $8,900 Miscellaneous expense: $6,400 + $0.10q 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).

Barrom Memorial Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for July is to be based on 2,000 meals.The diner's director has provided the following cost formulas to use in the budget: Required: Prepare the diner's budget for the month of July.The budget will only contain the costs listed above; no revenues will be on the budget.

Sincell Corporation uses customers served as its measure of activity.During April,the company budgeted for 22,000 customers,but actually served 24,000 customers.The company uses the following revenue and cost formulas in its budgeting,where q is the number of customers served: Revenue: $4.10q Wages and salaries: $26,000 + $1.10q Supplies: $0.70q Insurance: $7,100 Miscellaneous expense: $3,400 + $0.30q The company reported the following actual results for April: Required: Prepare a report showing the company's revenue and spending variances for April.Label each variance as favorable (F)or unfavorable (U).

Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 2,000 client-visits, but its actual level of activity was 2,010 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: -The activity variance for net operating income in July would be closest to:

Grohs 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 December, the kennel budgeted for 2,500 tenant-days, but its actual level of activity was 2,530 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: -The food and supplies in the flexible budget for December would be closest to:

At Jacobson Company,indirect labor is a variable cost that varies with direct labor-hours.Last month's performance report showed that actual indirect labor cost totaled $5,780 for the month and that the associated spending variance was $245 F.If 24,100 direct labor-hours were actually worked last month,then the flexible budget cost formula for indirect labor must be (per direct labor-hour):