Exam 9: Master Budgeting

Blaster Inc. ,manufactures portable radios.Each radio requires 3 units of Part XBEZ52,which has a standard cost of $1.45 per unit.During May,the company purchased 12,000 units of the part for a total of $18,000.Also during May,the company manufactured 3,000 radios,using 10,000 units of part XBEZ52.The direct materials purchases variance is computed when the materials are purchased. During May,the materials price variance for part XBEZ52 was:

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 labor efficiency variance for March is:

During July,Heron Corporation plans to serve 23,000 customers.Revenue is $6.80 per customer served.Wages and salaries are $39,900 per month plus $2.50 per customer served.Supplies are $1.40 per customer served.Insurance is $10,300 per month.Miscellaneous expenses are $4,800 per month plus $0.20 per customer served. Required: Prepare the company's planning budget for July.

The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What is the labor rate variance for the month?

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.

Berends Corporation makes a product with the following standard costs: The company reported the following results concerning this product in April. 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 price variance for April is:

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:

Biery Corporation makes a product with the following standard costs: The company produced 4,100 units in April using 5,380 liters of direct material and 2,610 direct labor-hours.During the month,the company purchased 6,000 liters of the direct material at $5.80 per liter.The actual direct labor rate was $19.80 per hour and the actual variable overhead rate was $2.90 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 variable overhead efficiency variance for April is:

Moates Corporation makes a product with the following standard costs: In January the company produced 5,800 units using 38,740 kilos of the direct material and 1,110 direct labor-hours.During the month,the company purchased 41,000 kilos of the direct material at a total cost of $49,200.The actual direct labor cost for the month was $20,979 and the actual variable overhead cost was $6,993.The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. Required: a.Compute the materials quantity variance. b.Compute the materials price variance. c.Compute the labor efficiency variance. d.Compute the labor rate variance. e.Compute the variable overhead efficiency variance. f.Compute the variable overhead rate variance.

Smithj 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 3,500 tenant-days,but its actual level of activity was 3,490 tenant-days.The kennel 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 spending variance for facility expenses in February would be closest to:

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 rate variance for February is:

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 net operating income in the planning budget for May would be closest to:

Melrose Corporation makes a product that uses a material with the following standards: The company budgeted for production of 5,800 units in September,but actual production was 5,900 units.The company used 50,210 pounds of direct material to produce this output.The company purchased 55,100 pounds of the direct material at $5.80 per pound. The direct materials purchases variance is computed when the materials are purchased. The materials price variance for September is:

Eberley Corporation's cost formula for its manufacturing overhead is $25,700 per month plus $10 per machine-hour.For the month of July,the company planned for activity of 5,900 machine-hours,but the actual level of activity was 5,920 machine-hours.The actual manufacturing overhead for the month was $86,800. The manufacturing overhead in the planning budget 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 administrative expenses in the planning budget for June would be closest to:

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 variable overhead efficiency variance for June is:

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:

Pettry Snow Removal's cost formula for its vehicle operating cost is $2,170 per month plus $408 per snow-day.For the month of December,the company planned for activity of 16 snow-days,but the actual level of activity was 13 snow-days.The actual vehicle operating cost for the month was $7,600.The vehicle operating cost in the planning budget for December would be closest to:

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 food and supplies in the flexible budget for March would be closest to:

Biery Corporation makes a product with the following standard costs: The company produced 4,100 units in April using 5,380 liters of direct material and 2,610 direct labor-hours.During the month,the company purchased 6,000 liters of the direct material at $5.80 per liter.The actual direct labor rate was $19.80 per hour and the actual variable overhead rate was $2.90 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 variable overhead rate variance for April is: