Exam 9: Flexible Budgets and Performance Analysis

Dukette Memorial Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for August was based on 2,600 meals,but the diner actually served 2,200 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 report showing the activity variances for each of the expenses and for total expenses for August.Label each variance as favorable (F)or unfavorable (U).

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 manufacturing overhead in the flexible budget for November would be closest to:

Higgs Enterprise's flexible budget cost formula for indirect materials,a variable cost,is $0.75 per unit of output.If the company's performance report for last month shows a $600 favorable spending variance for indirect materials and if 8,000 units of output were produced last month,then the actual costs incurred for indirect materials for the month must have been:

Moncrief Corporation bases its budgets on machine-hours. The company's static planning budget for July appears below: Actual results for the month were: -The spending variance for power costs in the flexible budget performance report for the month should be:

Neeb Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During January, the company budgeted for 7,000 units, but its actual level of activity was 7,040 units. The company 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 direct labor in the planning budget for January would be closest to:

Ruge Clinic bases its budgets on the activity measure patient-visits.During November,the clinic planned for 2,100 patient-visits,but the actual level of activity was 2,300 patient-visits.The clinic has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare a report showing the clinic's activity variances for November.Indicate in each case whether the variance is favorable (F)or unfavorable (U).

Neeb Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During January, the company budgeted for 7,000 units, but its actual level of activity was 7,040 units. The company 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 manufacturing overhead in the flexible budget for January 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 "Other expenses" in the planning budget for November would have been closest to:

Guareno Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,450 client-visits. The clinic 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 occupancy expenses in the flexible budget for December would be closest to:

Kaina Clinic uses client-visits as its measure of activity. During May, 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 May: Data used in budgeting: Actual results for May: -The activity variance for net operating income in May would be closest to:

Otomo 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 July,the company budgeted for 389 guests and 180 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 July.Label each variance as favorable (F)or unfavorable (U).

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

Malander 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 November, the kennel budgeted for 3,400 tenant-days, but its actual level of activity was 3,390 tenant-days. The kennel 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 spending variance for food and supplies in November would be closest to:

Mandalay Hotel bases its budgets on guest-days. The hotel's static budget for August appears below: -The total variable cost at the activity level of 5,000 guest-days per month should be:

Birkner Corporation's flexible budget performance report for last month shows that actual indirect materials cost,a variable cost,was $30,444 and that the spending variance for indirect materials cost was $8,142 favorable.During that month,the company worked 17,700 machine-hours.Budgeted activity for the month had been 18,200 machine-hours.The cost formula per machine-hour for indirect materials cost must have been 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 net operating income in the planning budget for December would be closest to:

Prowse 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. A total of 42 wells were actually serviced during October. -The "Other expenses" in the flexible budget for October would have been closest to:

Pratte Boat Wash's cost formula for its cleaning equipment and supplies is $2,460 per month plus $49 per boat. For the month of April, the company planned for activity of 58 boats, but the actual level of activity was 18 boats. The actual cleaning equipment and supplies for the month was $3,470. Why such a great disparity between the planned and actual level of activity from 58 to 18 boats - should these be closer together? Please keep as is. Such a large discrepancy is ok. -The cleaning equipment and supplies in the flexible budget for April would be closest to:

Dermody Snow Removal's cost formula for its vehicle operating cost is $2,850 per month plus $317 per snow-day.For the month of December,the company planned for activity of 16 snow-days,but the actual level of activity was 14 snow-days.The actual vehicle operating cost for the month was $7,640.The spending variance for vehicle operating cost in December would be closest to:

Nobriga Corporation uses customers served as its measure of activity.During October,the company budgeted for 29,000 customers,but actually served 33,000 customers.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: Required: Prepare a report showing the company's revenue and spending variances for October.Label each variance as favorable (F)or unfavorable (U).