Exam 9: Flexible Budgets and Performance Analysis

Schoening 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 January. When the company prepared its planning budget at the beginning of January, it assumed that 40 containers would have been refurbished. However, 38 containers were actually refurbished during January. -The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for January would have been closest to:

Quesnel Clinic bases its budgets on the activity measure patient-visits.During February,the clinic planned for 2,800 patient-visits,but its actual level of activity was 3,000 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 February.Indicate in each case whether the variance is favorable (F)or unfavorable (U).

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 direct labor in the planning budget for May would be 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 "Employee salaries and wages" in the planning budget for March 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 spending variance for cleaning equipment and supplies in April would be closest to:

Dure Corporation's cost formula for its selling and administrative expense is $24,500 per month plus $1 per unit. For the month of July, the company planned for activity of 7,200 units, but the actual level of activity was 7,160 units. The actual selling and administrative expense for the month was $31,460. -The activity variance for selling and administrative expense in July 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 October would have been 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 revenue variance for February would be closest to:

Lightsey Natural Dying Corporation measures its activity in terms of skeins of yarn dyed.Last month,the budgeted level of activity was 14,800 skeins and the actual level of activity was 15,100 skeins.The company's owner budgets for dye costs,a variable cost,at $0.51 per skein.The actual dye cost last month was $8,660.In the company's flexible budget performance report for last month,what would have been the spending variance for dye costs?

Sathre 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 December,it assumed that 34 wells would have been serviced.However,32 wells were actually serviced during December. The "Employee salaries and wages" in the flexible budget for December would have been closest to:

Ibsen Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,340 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 net operating income in the flexible budget for December would be closest to:

-Hirons 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 $56,840 per month plus $2,874 per flight plus $13 per passenger.The company expected its activity in November to be 86 flights and 255 passengers,but the actual activity was 89 flights and 257 passengers.The actual cost for plane operating costs in November was $305,100.The spending variance for plane operating costs in November would be closest to:

If activity is higher than expected,total fixed costs should be higher than expected.If activity is lower than expected,total fixed costs should be lower than expected.

Dubberly Corporation's cost formula for its manufacturing overhead is $30,600 per month plus $64 per machine-hour. For the month of March, the company planned for activity of 7,900 machine-hours, but the actual level of activity was 7,880 machine-hours. The actual manufacturing overhead for the month was $558,610. -The manufacturing overhead in the planning budget for March would be closest to:

Taussig Snow Removal's cost formula for its vehicle operating cost is $1,880 per month plus $394 per snow-day.For the month of February,the company planned for activity of 13 snow-days,but the actual level of activity was 14 snow-days.The actual vehicle operating cost for the month was $7,250.The activity variance for vehicle operating cost in February would be closest to:

Isadore Hospital bases its budgets on patient-visits. The hospital's static planning budget for July appears below: Actual results for the month were: -The spending variance for occupancy costs in the flexible budget performance report for the month is:

Medlar Corporation's static planning budget for June appears below. The company bases its budgets on machine-hours. In June, the actual number of machine-hours was 9,300, the actual supplies cost was $19,760, the actual power cost was $35,720, the actual salaries cost was $27,130, and the actual equipment depreciation was $39,430. -The spending variance for supplies cost in the flexible budget performance report for the month should be:

Mongelli Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion.The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms.The Inn's overhead budget for the most recent month appears below: The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 99 guests?

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 "Travel expenses" for October would have been closest to:

Meinke 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 April, the kennel budgeted for 3,700 tenant-days, but its actual level of activity was 3,680 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for April: Data used in budgeting: Actual results for April: -The food and supplies in the flexible budget for April would be closest to: