Exam 9: Flexible Budgets and Performance Analysis

Cosme 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 April, the school budgeted for 1, 870 students and 174 courses.The school's income statement showing the actual results for the month appears below: Required: Prepare a flexible budget performance report showing both the school's activity variances and revenue and spending variances for April.Label each variance as favorable (F)or unfavorable (U).

Ros Corporation's flexible budget cost formula for indirect materials, a variable cost, is $0.90 per unit of output.If the company's performance report for last month shows a $500 unfavorable spending variance for indirect materials and if 8, 000 units of output were produced last month, then the actual costs incurred for indirect materials for the month must have been:

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 administrative expenses in the planning budget for February 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 activity variance for administrative expenses in July would be closest to:

During January, Desousa Clinic plans for an activity level of 3, 200 patient-visits.Revenue is $38.50 per patient-visit.Personnel expenses are $36, 700 per month plus $10.20 per patient-visit.Medical supplies are $1, 800 per month plus $6.00 per patient-visit.Occupancy expenses are $7, 600 per month plus $1.50 per patient-visit.Administrative expenses are $4, 600 per month plus $0.20 per patient-visit. Required: Prepare the clinic's planning budget for January.

Leaphart 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 2, 800 tenant-days, but its actual level of activity was 2, 840 tenant-days.The kennel has provided the following data concerning the formulas to be used in its budgeting: The wages and salaries in the planning budget for May would be closest to:

Nicolaysen 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, 700 units, but its actual level of activity was 5, 690 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 planning budget for February would be closest to:

Which of the following comparisons best isolates the impact that changes in operating efficiency have on performance?

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 administrative expenses in the planning budget for August would be closest to:

Ordway 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 June, the kennel budgeted for 2, 100 tenant-days, but its actual level of activity was 2, 070 tenant-days.The kennel 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 facility expenses in the flexible budget for June 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 manufacturing overhead in the flexible budget for February would be closest to:

Zike Corporation's static planning budget for October appears below.The company bases its budgets on machine-hours. In October, the actual number of machine-hours was 6, 000, the actual supplies cost was $14, 740, the actual power cost was $49, 170, the actual salaries cost was $15, 390, and the actual equipment depreciation was $63, 670. The spending variance for supplies cost in the flexible budget performance report for the month should be:

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

Hejl 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 $210 per month plus $86 per job plus $15 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 March to be 23 jobs and 222 meals, but the actual activity was 28 jobs and 217 meals.The actual cost for catering supplies in March was $5, 830.The spending variance for catering supplies in March 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 facility expenses in the flexible budget for May would be closest to:

Bard Hotel bases its budgets on guest-days.The hotel's static budget for January appears below: The total cost at the activity level of 10, 300 guest-days per month should be:

Tetrault 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 February, the company budgeted for 448 guests and 173 jeeps.The company's income statement showing the actual results for the month appears below: Required: Prepare a report showing the company's activity variances for February.Label each variance as favorable (F)or unfavorable (U).

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 spending variance for food and supplies in May would be closest to:

Linscott 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 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 July: Data used in budgeting: Actual results for July: The activity variance for selling and administrative expenses in July would be closest to:

Mondo Snow Removal's cost formula for its vehicle operating cost is $1, 060 per month plus $429 per snow-day.For the month of January, the company planned for activity of 11 snow-days, but the actual level of activity was 13 snow-days.The actual vehicle operating cost for the month was $6, 310.The activity variance for vehicle operating cost in January would be closest to: