Exam 9: Master Budgeting

Hettinger Hospital bases its budgets on patient-visits.The hospital's static budget for March appears below: The total cost at the activity level of 7,300 patient-visits per month should be:

The following data have been provided by Mathews Corporation: Lubricants and supplies are both elements of variable manufacturing overhead. The variable overhead rate variance for lubricants is closest to:

Gandrud 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 2,600 tenant-days,but its actual level of activity was 2,580 tenant-days.The kennel has provided the following data concerning the formulas to be used in its budgeting: The net operating income in the flexible budget for June would be closest to:

Purchase of poor quality materials may cause a favorable materials price variance and an unfavorable labor efficiency variance.

Jiminian Clinic uses client-visits as its measure of activity.During March,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 used in its budgeting and its actual results for March: Data used in budgeting: Actual results for March: The medical supplies in the flexible budget for March would be closest to:

Desue Corporation makes a product with the following standards for labor and variable overhead: The company budgeted for production of 6,500 units in December,but actual production was 6,300 units.The company used 610 direct labor-hours to produce this output.The actual variable overhead rate was $6.40 per hour.The company applies variable overhead on the basis of direct labor-hours. The variable overhead efficiency variance for December is:

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

The following standards for variable overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: Required: a.What is the variable overhead rate variance for the month? b.What is the variable overhead efficiency variance for the month?

Larance Detailing's cost formula for its materials and supplies is $2,230 per month plus $1 per vehicle.For the month of November,the company planned for activity of 75 vehicles,but the actual level of activity was 25 vehicles.The actual materials and supplies for the month was $2,160. The materials and supplies in the planning budget for November would be closest to:

The Collins Corporation uses standard costing and has established the following direct material and direct labor standards for each unit of the single product it makes: • Direct materials: 4 gallons at $8 per gallon • Direct labor: 1 hour at $16 per hour During July,the company made 6,000 units of product and incurred the following costs: • Direct materials purchased: 26,800 gallons at $8.20 per gallon • Direct materials used: 25,200 gallons • Direct labor used: 5,600 hours at $15.30 per hour The direct materials purchases variance is computed when the materials are purchased. The materials price variance for July was:

The Collins Corporation uses standard costing and has established the following direct material and direct labor standards for each unit of the single product it makes: • Direct materials: 4 gallons at $8 per gallon • Direct labor: 1 hour at $16 per hour During July,the company made 6,000 units of product and incurred the following costs: • Direct materials purchased: 26,800 gallons at $8.20 per gallon • Direct materials used: 25,200 gallons • Direct labor used: 5,600 hours at $15.30 per hour The direct materials purchases variance is computed when the materials are purchased. The labor rate variance for July was:

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:

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:

Gilder Corporation makes a product with the following standard costs: The company reported the following results concerning this product in June. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for June is:

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 revenue variance for August would be closest to:

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 a report showing the company's revenue and spending variances for July.Label each variance as favorable (F)or unfavorable (U).

Tammo 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 June,the company budgeted for 430 guests and 172 jeeps.The actual activity for the month was 440 guests and 171 jeeps. Required: Prepare the company's planning budget for June.

Imrie Corporation makes a product that uses a material with the quantity standard of 9.5 grams per unit of output and the price standard of $5.00 per gram.In January the company produced 2,900 units using 26,940 grams of the direct material.During the month the company purchased 28,900 grams of the direct material at $4.90 per gram.The direct materials purchases variance is computed when the materials are purchased. The materials price variance for January is:

Galla Corporation makes a product with the following standard costs: The company budgeted for production of 2,400 units in June,but actual production was 2,500 units.The company used 19,850 pounds of direct material and 980 direct labor-hours to produce this output.The company purchased 21,700 pounds of the direct material at $6.70 per pound.The actual direct labor rate was $19.20 per hour and the actual variable overhead rate was $1.80 per hour. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. The labor rate variance for June is: