Exam 9: Flexible Budgets and Performance Analysis

Hagel Clinic uses client-visits as its measure of activity.During July, the clinic budgeted for 2, 300 client-visits, but its actual level of activity was 2, 320 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for July: Data used in budgeting: Actual results for July: The revenue variance for July would be closest to:

Miao Clinic uses client-visits as its measure of activity.During July, the clinic budgeted for 3, 000 client-visits, but its actual level of activity was 2, 980 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for July: Actual results for July: The occupancy expenses in the flexible budget for July would be closest to:

Eberley Corporation's cost formula for its manufacturing overhead is $25, 700 per month plus $10 per machine-hour.For the month of July, the company planned for activity of 5, 900 machine-hours, but the actual level of activity was 5, 920 machine-hours.The actual manufacturing overhead for the month was $86, 800. The manufacturing overhead in the flexible budget for July would be closest to:

A static planning budget is suitable for planning but is inappropriate for evaluating how well costs are controlled.

Buonocore Clinic uses client-visits as its measure of activity.During August, the clinic budgeted for 2, 800 client-visits, but its actual level of activity was 2, 770 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for August: Data used in budgeting: Actual results for August: The medical supplies in the flexible budget for August would be closest to:

Sorrow 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 2, 300 tenant-days, but its actual level of activity was 2, 350 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 activity variance for net operating income in November would be closest to:

Kudej 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, 360 per month plus $570 per press run plus $910 per book set-up.The company expected its activity in May to be 194 press runs and 74 book set-ups, but the actual activity was 195 press runs and 72 book set-ups.The actual cost for wages and salaries in May was $188, 370. The wages and salaries in the planning budget for May would be closest to:

Paye Clinic uses patient-visits as its measure of activity.The following report compares the planning budget to the actual operating results for the month of January: Required: Prepare the clinic's flexible budget performance report for January.Label each variance as favorable (F)or unfavorable (U).

Payeur Corporation uses customers served as its measure of activity.The company bases its budgets on the following information: Revenue should be $4.50 per customer served.Wages and salaries should be $38, 300 per month plus $1.40 per customer served.Supplies should be $0.80 per customer served.Insurance should be $10, 100 per month.Miscellaneous expenses should be $5, 400 per month plus $0.40 per customer served. The company reported the following actual results for December: Required: Prepare a report showing the company's revenue and spending variances for December.Label each variance as favorable (F)or unfavorable (U).

Lehnertz Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During February, the company budgeted for 7, 100 units, but its actual level of activity was 7, 150 units.The company 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 direct materials in the flexible budget for February would be closest to:

Hammes Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During February, the company budgeted for 5, 500 units, but its actual level of activity was 5, 510 units.The company has provided the following data concerning the formulas to be used in its budgeting: The activity variance for selling and administrative expenses in February would be closest to:

Krejci 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 $41, 430 per month plus $2, 419 per flight plus $6 per passenger.The company expected its activity in March to be 84 flights and 222 passengers, but the actual activity was 81 flights and 220 passengers.The actual cost for plane operating costs in March was $239, 870.The plane operating costs in the planning budget for March would be closest to:

Amundson 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 September, the company budgeted for 456 guests and 155 jeeps.The company's income statement showing the actual results for the month appears below: Required: Prepare a report showing the company's revenue and spending variances for September.Label each variance as favorable (F)or unfavorable (U).

Illescas Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During December, the company budgeted for 6, 400 units, but its actual level of activity was 6, 440 units.The company 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:

Wesolick Clinic uses client-visits as its measure of activity.During August, the clinic budgeted for 2, 900 client-visits, but its actual level of activity was 2, 870 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for August: Data used in budgeting: Actual results for August: The spending variance for medical supplies in August would be closest to:

Tysor Framing's cost formula for its supplies cost is $2, 610 per month plus $17 per frame.For the month of July, the company planned for activity of 710 frames, but the actual level of activity was 712 frames.The actual supplies cost for the month was $14, 540.The spending variance for supplies cost in July would be closest to:

Labombard Clinic uses client-visits as its measure of activity.During February, the clinic budgeted for 3, 600 client-visits, but its actual level of activity was 3, 650 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 personnel expenses in the planning budget for February would be closest to:

A revenue variance is unfavorable if the actual revenue is less than the revenue in the static planning budget.

Hagel Clinic uses client-visits as its measure of activity.During July, the clinic budgeted for 2, 300 client-visits, but its actual level of activity was 2, 320 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for July: Data used in budgeting: Actual results for July: 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 July would be closest to:

Spirer Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During September, the company budgeted for 6, 700 units, but its actual level of activity was 6, 750 units.The company 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 activity variance for direct labor in September would be closest to: