Exam 9: Flexible Budgets and Performance Analysis

Furney Clinic uses patient-visits as its measure of activity.During May,the clinic budgeted for 3,400 patient-visits,but its actual level of activity was 3,000 patient-visits.The clinic bases its budgets on the following information: Revenue should be $38.00 per patient-visit.Personnel expenses should be $36,000 per month plus $10.80 per patient-visit.Medical supplies should be $1,000 per month plus $6.00 per patient-visit.Occupancy expenses should be $9,300 per month plus $2.00 per patient-visit.Administrative expenses should be $5,500 per month plus $0.30 per patient-visit.The clinic reported the following actual results for May: Required: Prepare the clinic's flexible budget performance report for May.Label each variance as favorable (F)or unfavorable (U).

Bracken Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,100 client-visits, but its actual level of activity was 2,140 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for September: Data used in budgeting: Actual results for September: -The spending variance for medical supplies in September would be closest to:

Bracken Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,100 client-visits, but its actual level of activity was 2,140 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for September: Data used in budgeting: Actual results for September: -The spending variance for occupancy expenses in September would be closest to:

Spohn Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,370 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for February: -The net operating income in the planning budget for February would be closest to:

The main difference between a flexible budget and a static budget is that the static budget is not adjusted for changes in the level of activity.

A revenue variance is favorable if the actual revenue is greater than the revenue in the static planning budget.

Cosden 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 May,it assumed that 29 wells would have been serviced.However,31 wells were actually serviced during May. The total expenses in the flexible budget for May would have been 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 activity variance for revenue for June would have been closest to:

Luckman Corporation bases its budgets on the activity measure customers served.During July,the company plans to serve 32,000 customers.The company has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare the company's planning budget for July.

If the actual level of activity differs from what was planned,it would be misleading to compare actual costs to the static,unchanged planning budget.

Neighbors 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 3,000 tenant-days, but its actual level of activity was 2,960 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 activity variance for administrative expenses in April 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 "Employee salaries and wages" in the flexible budget for October 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 personnel expenses in the planning budget for December would be closest to:

Pargo Corporation bases its budgets on the activity measure customers served.During May,the company planned to serve 29,000 customers,but actually served 30,000 customers.The company has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare the company's flexible budget for May based on the actual level of activity for the month.

Piechocki 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 5,900 units, but its actual level of activity was 5,940 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 direct materials in May would be closest to:

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 activity variance for net operating income in February 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 revenue variance for November would be closest to: