Exam 9: Flexible Budgets and Performance Analysis

Coderre Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During July, the company budgeted for 7, 800 units, but its actual level of activity was 7, 780 units.The company 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:

Zelenka Clinic uses client-visits as its measure of activity.During June, the clinic budgeted for 2, 700 client-visits, but its actual level of activity was 2, 710 client-visits.The clinic has provided the following data concerning the formulas to be used in its budgeting for June: The net operating income in the planning budget for June 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 activity variance for wages and salaries in May would be closest to:

Loomer 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 $550 per month plus $95 per job plus $21 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 July to be 12 jobs and 136 meals, but the actual activity was 13 jobs and 137 meals.The actual cost for catering supplies in July was $4, 770.The catering supplies in the planning budget for July would be closest to:

Tulip Midwifery's cost formula for its wages and salaries is $2, 420 per month plus $388 per birth.For the month of January, the company planned for activity of 119 births, but the actual level of activity was 123 births.The actual wages and salaries for the month was $50, 540.The wages and salaries in the flexible budget for January would be closest to:

Glassing Clinic uses client-visits as its measure of activity.During September, the clinic budgeted for 3, 700 client-visits, but its actual level of activity was 3, 660 client-visits.The clinic has provided the following data concerning the formulas to be used in its budgeting: The activity variance for net operating income in September would be closest to:

Prater 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, 400 units, but its actual level of activity was 5, 380 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 net operating income in the flexible budget for February would be closest to:

Prater 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, 400 units, but its actual level of activity was 5, 380 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 labor in the planning budget for February 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 flexible budget for September would be closest to:

Sund Corporation bases its budgets on the activity measure customers served.During April, the company plans to serve 38, 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 April.

A major weakness of flexible budgets is that:

Diemert Corporation bases its budgets on machine-hours.The company's static planning budget for June appears below: Actual results for the month were: The spending variance for power costs in the flexible budget performance report for the month should be:

Carvana Clinic uses patient-visits as its measure of activity.During December, the clinic budgeted for 3, 400 patient-visits, but its actual level of activity was 3, 100 patient-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: Required: Prepare a report showing the clinic's revenue and spending variances for December.Label each variance as favorable (F)or unfavorable (U).

Gearhart Corporation bases its budgets on the activity measure customers served.During September, the company planned to serve 25, 000 customers, but actually served 29, 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 September based on the actual level of activity for the month.

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 activity variance for wages and salaries in March would be closest to:

Lueders Memorial Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for April was based on 3, 800 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 flexible budget performance report showing both the activity variances and the spending variances for each of the expenses and for total expenses for April.Label each variance as favorable (F)or unfavorable (U).

Rossetto Corporation bases its budgets on the activity measure customers served.During January, the company planned to serve 30, 000 customers, but actually served 33, 000 customers.Revenue is $4.10 per customer served.Wages and salaries are $36, 000 per month plus $1.50 per customer served.Supplies are $0.50 per customer served.Insurance is $12, 000 per month.Miscellaneous expenses are $4, 800 per month plus $0.10 per customer served. Required: Prepare a report showing the company's activity variances for January.Indicate in each case whether the variance is favorable (F)or unfavorable (U).

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 spending variance for wages and salaries in May would be closest to:

Bracamonte Hospital bases its budgets on patient-visits.The hospital's static planning budget for November appears below: Required: Prepare a flexible budget for 8, 900 patient-visits per month.

Fortmann 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 September, the kennel budgeted for 2, 000 tenant-days, but its actual level of activity was 2, 010 tenant-days.The kennel has provided the following data concerning the formulas to be used in its budgeting: The activity variance for administrative expenses in September would be closest to: