Exam 9: Flexible Budgets and Performance Analysis

Kari 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 May, the kennel budgeted for 3, 200 tenant-days, but its actual level of activity was 3, 230 tenant-days.The kennel 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 administrative expenses in the planning budget for May would be closest to:

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 activity variance for personnel expenses in 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 wages and salaries in November would be closest to:

Juenemann 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, 800 tenant-days, but its actual level of activity was 3, 770 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 facility expenses in the flexible budget for December would be closest to:

Lartey Corporation's cost formula for its selling and administrative expense is $22, 200 per month plus $27 per unit.For the month of December, the company planned for activity of 5, 300 units, but the actual level of activity was 5, 270 units.The actual selling and administrative expense for the month was $168, 150. The selling and administrative expense in the flexible budget for December would be closest to:

Shelby Boat Wash's cost formula for its cleaning equipment and supplies is $2, 200 per month plus $34 per boat.For the month of September, the company planned for activity of 82 boats, but the actual level of activity was 32 boats.The actual cleaning equipment and supplies for the month was $3, 340. The cleaning equipment and supplies in the planning budget for September would be closest to:

Kari 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 May, the kennel budgeted for 3, 200 tenant-days, but its actual level of activity was 3, 230 tenant-days.The kennel 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 activity variance for administrative expenses in May would be closest to:

Federick Clinic uses client-visits as its measure of activity.During October, the clinic budgeted for 3, 000 client-visits, but its actual level of activity was 3, 040 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for October: Data used in budgeting: Actual results for October: The personnel expenses in the planning budget for October would be closest to:

Vanderhyde 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 May, the kennel budgeted for 3, 300 tenant-days, but its actual level of activity was 3, 340 tenant-days.The kennel 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 net operating income in the planning budget for May 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: Data used in budgeting: Actual results for July: The spending variance for medical supplies in July would be closest to:

Hairston Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During November, the company budgeted for 7, 700 units, but its actual level of activity was 7, 720 units.The company 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 selling and administrative expenses in the planning budget for November would be closest to:

An unfavorable activity variance indicates that activity was too high for the amount of sales.

Bruess Clinic uses patient-visits as its measure of activity.During July, the clinic budgeted for 2, 700 patient-visits, but its actual level of activity was 3, 200 patient-visits.The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits: Revenue: $49.60q Personnel expenses: $31, 200 + $15.10q Medical supplies: $700 + $9.60q Occupancy expenses: $10, 000 + $2.00q Administrative expenses: $7, 000 + $0.20q The clinic reported the following actual results for July: Required: Prepare the clinic's flexible budget performance report for July.Label each variance as favorable (F)or unfavorable (U).

Wragg Urban Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for July was based on 2, 500 meals, but the diner actually served 2, 400 meals.The diner's director has provided the following cost data to use in the budget: groceries, $3.10 per meal;kitchen operations, $5, 800 per month plus $1.50 per meal;administrative expenses, $3, 600 per month plus $0.60 per meal;and fundraising expenses, $1, 600 per month.The director has also provided the diner's statement of actual expenses for the month: Required: Prepare a report showing the activity variances for each of the expenses and for total expenses for July.

Camcam Corporation uses customers served as its measure of activity.During July, the company budgeted for 26, 000 customers, but actually served 30, 000 customers.The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $4.90q Wages and salaries: $34, 400 + $1.60q Supplies: $1.00q Insurance: $8, 500 Miscellaneous expense: $5, 600 + $0.20q The company reported the following actual results for July: Required: Prepare the company's flexible budget performance report for July.Label each variance as favorable (F)or unfavorable (U).

Randt Footwear Corporation's flexible budget cost formula for supplies, a variable cost, is $2.79 per unit of output.The company's flexible budget performance report for last month showed a $5, 363 favorable spending variance for supplies.During that month, 17, 300 units were produced.Budgeted activity for the month had been 17, 200 units.The actual cost per unit for indirect materials must have been closest to:

Lantagne Clinic uses client-visits as its measure of activity.During May, the clinic budgeted for 3, 800 client-visits, but its actual level of activity was 3, 820 client-visits.The clinic 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 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 May would be closest to:

An activity variance is due to the difference between the level of activity used in the flexible budget and the actual level of activity.

Perla 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 March, the kennel budgeted for 2, 200 tenant-days, but its actual level of activity was 2, 160 tenant-days.The kennel 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 wages and salaries in the planning budget for March would be closest to:

In a flexible budget performance report, actual costs should be compared to the flexible budget at the original budgeted activity level.