Exam 9: Flexible Budgets and Performance Analysis

Brong 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 March. When the company prepared its planning budget at the beginning of March, it assumed that 22 containers would have been refurbished. However, 18 containers were actually refurbished during March. -The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for March would have been closest to:

Ruiz Clinic bases its budgets on the activity measure patient-visits.During July,the clinic planned for an activity level of 3,700 patient-visits,but the activity level was actually 3,600 patient-visits.The clinic has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare the clinic's flexible budget for July based on the actual level of activity for the month.

Rudick Corporation is an oil well service company that measures its output by the number of wells serviced.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 July,it assumed that 34 wells would have been serviced.However,36 wells were actually serviced during July. The activity variance for revenue for July would have been closest to:

Bernes 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 October, the kennel budgeted for 2,700 tenant-days, but its actual level of activity was 2,720 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: -The activity variance for wages and salaries in October would be closest to:

Lochner Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for June. When the company prepared its planning budget at the beginning of June, it assumed that 24 wells would have been serviced. However, 26 wells were actually serviced during June. -The spending variance for "Employee salaries and wages" for June would have been closest to:

Sunn Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During November, the company budgeted for 6,100 units, but its actual level of activity was 6,050 units. The company has provided the following data concerning the formulas to be used in its budgeting: -The net operating income in the flexible budget for November would be closest to:

Tennies Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,290 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting: Actual results for November: -The administrative expenses in the planning budget for November would be closest to:

-The variance for net operating income in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for March would have been closest to:

Tessmer 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 January, the kennel budgeted for 3,100 tenant-days, but its actual level of activity was 3,090 tenant-days. The kennel 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 food and supplies in the flexible budget for January would be closest to:

Standahl 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 $39,590 per month plus $2,649 per flight plus $4 per passenger. The company expected its activity in August to be 82 flights and 294 passengers, but the actual activity was 85 flights and 297 passengers. The actual cost for plane operating costs in August was $255,690. -The plane operating costs in the planning budget for August would be closest to:

Pickrel Corporation is an oil well service company that measures its output by the number of wells serviced. 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 November, it assumed that 27 wells would have been serviced. However, 31 wells were actually serviced during November. -The amount shown for "Employee salaries and wages" in the planning budget for November would have been closest to:

Feemster Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 5,900 units, but its actual level of activity was 5,850 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for October: Data used in budgeting: Actual results for October: -The activity variance for selling and administrative expenses in October would be closest to:

Fager Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,250 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting: Actual results for February: -The activity variance for personnel expenses in February would be closest to:

When using a flexible budget,a decrease in activity within the relevant range:

Duprey Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,150 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 personnel expenses in the planning budget for January would be closest to:

Kolstad Clinic uses patient-visits as its measure of activity.During September,the clinic budgeted for 2,200 patient-visits,but its actual level of activity was 2,600 patient-visits.The clinic uses the following revenue and cost formulas in its budgeting,where q is the number of patient-visits: Revenue: $61.70q Personnel expenses: $39,000 + $16.10q Medical supplies: $1,300 + $11.90q Occupancy expenses: $8,200 + $2.20q Administrative expenses: $5,900 + $0.20q The clinic reported the following actual results for September: Required: Prepare a report showing the clinic's revenue and spending variances for September.Label each variance as favorable (F)or unfavorable (U).

Kirkeby 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 May,it assumed that 32 containers would have been refurbished.However,34 containers were actually refurbished during May. The "Refurbishing materials" in the flexible budget for May would have been closest to:

Keisker Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,190 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting: Actual results for November: -The occupancy expenses in the flexible budget for November would be closest to:

Morles 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 May,the company budgeted for 407 guests and 113 jeeps.The company's income statement showing the actual results for the month appears below: Required: Prepare a flexible budget performance report showing both the company's activity variances and revenue and spending variances for May.Label each variance as favorable (F)or unfavorable (U).

-Bluemel 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 $43,670 per month plus $2,879 per flight plus $10 per passenger.The company expected its activity in December to be 85 flights and 281 passengers,but the actual activity was 90 flights and 278 passengers.The actual cost for plane operating costs in December was $314,740.The plane operating costs in the flexible budget for December would be closest to: