Exam 9: Master Budgeting

Longview Hospital performs blood tests in its laboratory.The following standards have been set for each blood test performed: During May,the laboratory performed 1,500 blood tests.On May 1 there were no direct materials (plates)on hand;after a plate is used for a blood test it is discarded.Variable overhead is assigned to blood tests on the basis of standard direct labor-hours.The following events occurred during May: • 3,600 plates were purchased for $9,540 • 3,200 plates were used for blood tests • 340 actual direct labor-hours were worked at a cost of $5,550 The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for May is:

Wales 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 February,the kennel budgeted for 2,700 tenant-days,but its actual level of activity was 2,730 tenant-days.The kennel has provided the following data concerning the formulas to be used in its budgeting: The administrative expenses in the planning budget for February would be closest to:

A quantity of a particular raw material was purchased for $43,250.The standard cost of the material was $2.00 per kilogram and there was an unfavorable materials price variance of $3,250.How many kilograms were purchased?

Zacher Corporation makes a product with the following standards for direct labor and variable overhead: In February the company's budgeted production was 6,900 units,but the actual production was 7,000 units.The company used 1,980 direct labor-hours to produce this output.The actual variable overhead cost was $10,296.The company applies variable overhead on the basis of direct labor-hours. The variable overhead efficiency variance for February is:

Ortman Corporation makes a product with the following standard costs: The company reported the following results concerning this product in May. 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 May is:

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:

Nicolini 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 October,the kennel budgeted for 2,200 tenant-days,but its actual level of activity was 2,250 tenant-days.The kennel 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 food and supplies in the flexible budget for October would be closest to:

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

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:

Satoe Corporation uses customers served as its measure of activity.During April,the company budgeted for 25,000 customers,but actually served 23,000 customers.The company has provided the following data concerning the formulas used in its budgeting and its actual results for April: Data used in budgeting: Actual results for April: Required: Prepare a report showing the company's revenue and spending variances for April.Label each variance as favorable (F)or unfavorable (U).

Ishibashi Snow Removal's cost formula for its vehicle operating cost is $1,240 per month plus $337 per snow-day.For the month of February,the company planned for activity of 17 snow-days,but the actual level of activity was 12 snow-days.The actual vehicle operating cost for the month was $5,140.The spending variance for vehicle operating cost in February would be closest to:

Pardoe Inc. ,manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours.The company uses a standard cost system and has established the following standards for one unit of product: During March,the following activity was recorded by the company: • The company produced 3,000 units during the month. • A total of 8,000 pounds of material were purchased at a cost of $23,000. • There was no beginning inventory of materials on hand to start the month;at the end of the month,2,000 pounds of material remained in the warehouse. • During March,1,600 direct labor-hours were worked at a rate of $6.50 per hour. • Variable manufacturing overhead costs during March totaled $1,800. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for March is:

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 report showing the revenue and spending variances for each of the expenses and for total expenses for April.Label each variance as favorable (F)or unfavorable (U).

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 occupancy expenses in the flexible budget for July would be closest to:

Tabeling Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During August,the company budgeted for 6,500 units,but its actual level of activity was 6,540 units.The company 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 net operating income in the flexible budget for August would be closest to:

Hepburn Clinic uses client-visits as its measure of activity.During July,the clinic budgeted for 3,200 client-visits,but its actual level of activity was 3,180 client-visits.The clinic has provided the following data concerning the formulas to be used in its budgeting for July: The administrative expenses in the planning budget for July would be closest to:

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.

The variable overhead efficiency variance measures how efficiently variable manufacturing overhead resources were used.

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 direct materials in the flexible budget for November would be closest to:

Eliezrie Corporation makes a product with the following standard costs: In January the company's budgeted production was 7,400 units but the actual production was 7,500 units.The company used 45,580 kilos of the direct material and 2,030 direct labor-hours to produce this output.During the month,the company purchased 48,500 kilos of the direct material at a cost of $53,350.The actual direct labor cost was $18,473 and the actual variable overhead cost was $7,714. 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 variable overhead efficiency variance for January is: