Exam 9: Flexible Budgets and Performance Analysis

Wellmann 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 February. When the company prepared its planning budget at the beginning of February,it assumed that 35 customers would have been served.However,31 customers were actually served during February. The spending variance for total expenses for February would have been 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 net operating income in the flexible budget for June would be closest to:

Hislop Tech is a for-profit vocational school.The school bases its budgets on two measures of activity (i.e.,cost drivers),namely student and course.The school uses the following data in its budgeting: In June,the school budgeted for 1,910 students and 111 courses.The school's income statement showing the actual results for the month appears below: Required: Prepare a report showing the school's revenue and spending variances for June.Label each variance as favorable (F)or unfavorable (U).

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 "Servicing materials" in the flexible budget for October would have been closest to:

Cardero Midwifery's cost formula for its wages and salaries is $2,280 per month plus $348 per birth.For the month of August,the company planned for activity of 118 births,but the actual level of activity was 116 births.The actual wages and salaries for the month was $44,120.The wages and salaries in the planning budget for August 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 overall revenue and spending variance (i.e.,the variance for net operating income in the revenue and spending variance column on the flexible budget performance report)for February would be closest to:

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 medical supplies in the flexible budget for September would be closest to:

Tuton Memorial Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for July was based on 3,200 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 spending variances for each of the expenses and for total expenses for July.Label each variance as favorable (F)or unfavorable (U).

Bonavita 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. When the company prepared its planning budget at the beginning of July,it assumed that 33 customers would have been served. The amount shown for net operating income in the planning budget for July would have been closest to:

Skoff 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 35 containers would have been refurbished. However, 32 containers were actually refurbished during March. -The activity variance for "Other expenses" for March would have been closest to:

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 net operating income in the flexible budget for June would be closest to:

Schriever 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. The number of wells serviced in the planning budget is missing from the given information - this information is necessary to complete the calculations in the subsequent questions. The planning budget for May was based on 36 wells serviced, but aA total of 31 wells were actually serviced during May. -The activity variance for "Employee salaries and wages" for May would have been closest to:

Teel Printing uses two measures of activity, press runs and book set-ups, in the cost formulas in its budgets and performance reports. The cost formula for wages and salaries is $8,850 per month plus $400 per press run plus $950 per book set-up. The company expected its activity in July to be 204 press runs and 111 book set-ups, but the actual activity was 201 press runs and 110 book set-ups. The actual cost for wages and salaries in July was $193,780. -The activity variance for wages and salaries in July would be closest to:

-Canniff 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 $56,560 per month plus $2,618 per flight plus $5 per passenger.The company expected its activity in February to be 63 flights and 254 passengers,but the actual activity was 62 flights and 255 passengers.The actual cost for plane operating costs in February was $218,820.The plane operating costs in the planning budget for February would be 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 activity variance for cleaning equipment and supplies in April would be closest to:

Tos Corporation's flexible budget cost formula for indirect materials,a variable cost,is $0.60 per unit of output.If the company's performance report for last month shows a $800 unfavorable spending variance for indirect materials and if 9,000 units of output were produced last month,then the actual costs incurred for indirect materials for the month must have been:

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 overall revenue and spending variance (i.e.,the variance for net operating income in the revenue and spending variance column on the flexible budget performance report)for June 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 wages and salaries in the planning budget for November would be closest to:

Shevlin Urban Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for July was based on 3,200 meals,but the diner actually served 3,600 meals.The diner's director has provided the following cost data to use in the budget: groceries,$3.35 per meal; kitchen operations,$5,800 per month plus $1.25 per meal; administrative expenses,$3,400 per month plus $0.40 per meal; and fundraising expenses,$1,400 per month. Required: Prepare a report showing the activity variances for each of the expenses and for total expenses for July.Label each variance as favorable (F)or unfavorable (U).

Thilking Midwifery's cost formula for its wages and salaries is $2,140 per month plus $454 per birth.For the month of August,the company planned for activity of 102 births,but the actual level of activity was 100 births.The actual wages and salaries for the month was $47,660.The wages and salaries in the flexible budget for August would be closest to: