Exam 9: Flexible Budgets and Performance Analysis

Manter Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 6,900 units, but its actual level of activity was 6,940 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Actual results for June: -The spending variance for direct materials in June would be closest to:

Harold 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 7,900 units, but its actual level of activity was 7,860 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Actual results for March: -The spending variance for direct materials in March would be closest to:

Lenci 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 5,100 units, but its actual level of activity was 5,050 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 spending variance for manufacturing overhead in May 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 net operating income in the planning budget for November would have been closest to:

Rhed 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 3,700 tenant-days, but its actual level of activity was 3,650 tenant-days. The kennel 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 activity variance for administrative expenses in December would be closest to:

Elvin Hospital bases its budgets on patient-visits.The hospital's static planning budget for May appears below: Required: Prepare a flexible budget for 5,300 patient-visits per month.

Paulis 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 February, the kennel budgeted for 2,500 tenant-days, but its actual level of activity was 2,480 tenant-days. The kennel 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 net operating income in the flexible budget for February would be closest to:

During September,Clendennen Corporation budgeted for 24,000 customers,but actually served 27,000 customers.The company uses the following revenue and cost formulas in its budgeting,where q is the number of customers served: Revenue: $6.00q Wages and salaries: $36,700 + $2.10q Supplies: $1.10q Insurance: $12,600 Miscellaneous expense: $4,600 + $0.30q Required: Prepare the company's flexible budget for September based on the actual level of activity for the month.

Mcinerney 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 October,the company budgeted for 325 guests and 91 jeeps.The actual activity for the month was 340 guests and 96 jeeps. Required: Prepare the company's flexible budget for the actual level of activity in October.

Capelli Hospital bases its budgets on patient-visits. The hospital's static budget for August appears below: -The total variable cost at the activity level of 9,300 patient-visits per month should be:

Ramkissoon Midwifery's cost formula for its wages and salaries is $2,060 per month plus $442 per birth.For the month of July,the company planned for activity of 117 births,but the actual level of activity was 114 births.The actual wages and salaries for the month was $54,500.The spending variance for wages and salaries in July would be closest to:

Chimilio Clinic uses client-visits as its measure of activity. During June, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,360 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Actual results for June: -The medical supplies in the flexible budget for June would be closest to:

Thorman 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 and the actual results of operations for August. When the company prepared its planning budget at the beginning of August,it assumed that 35 customers would have been served.However,39 customers were actually served during August. Required: Prepare a report showing the company's revenue and spending variances for August.Indicate in each case whether the variance is favorable (F)or unfavorable (U).

Differences between the static planning budget and the flexible budget show what should have happened because the actual level of activity differed from what had been planned.

Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 6,200 units, but its actual level of activity was 6,160 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Actual results for June: -The activity variance for net operating income in June would be closest to:

Ruozzo 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 and the actual results of operations for July. When the company prepared its planning budget at the beginning of July, it assumed that 27 customers would have been served. However, 22 customers were actually served during July. -The "Employee salaries and wages" in the flexible budget for July would have been closest to:

Groupe 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 $48,840 per month plus $2,381 per flight plus $7 per passenger.The company expected its activity in October to be 63 flights and 293 passengers,but the actual activity was 61 flights and 298 passengers.The actual cost for plane operating costs in October was $199,070.The activity variance for plane operating costs in October would be closest to:

Milot 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 April. When the company prepared its planning budget at the beginning of April, it assumed that 32 wells would have been serviced. However, 29 wells were actually serviced during April. -The amount shown for revenue in the planning budget for April would have been closest to:

Loughry Catering uses two measures of activity,jobs and meals,in the cost formulas in its budgets and performance reports.The cost formula for catering supplies is $530 per month plus $114 per job plus $16 per meal.A typical job involves serving a number of meals to guests at a corporate function or at a host's home.The company expected its activity in October to be 25 jobs and 234 meals,but the actual activity was 20 jobs and 233 meals.The actual cost for catering supplies in October was $6,600.The catering supplies in the flexible budget for October would be closest to:

A revenue variance is the difference between what the total sales revenue should been,given the actual level of activity of the period,and the actual total sales revenue.