Exam 9: Master Budgeting

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 wages and salaries in the planning budget for June would be closest to:

Hagel Clinic uses client-visits as its measure of activity.During July,the clinic budgeted for 2,300 client-visits,but its actual level of activity was 2,320 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 spending variance for occupancy expenses in July would be closest to:

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

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:

Amundson 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 September,the company budgeted for 456 guests and 155 jeeps.The company's income statement showing the actual results for the month appears below: Required: Prepare a report showing the company's revenue and spending variances for September.Label each variance as favorable (F)or unfavorable (U).

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

Krejci Air uses two measures of activity,flights and passengers,in the cost formulas in its budgets and performance reports.The cost formula for plane operating costs is $41,430 per month plus $2,419 per flight plus $6 per passenger.The company expected its activity in March to be 84 flights and 222 passengers,but the actual activity was 81 flights and 220 passengers.The actual cost for plane operating costs in March was $239,870.The plane operating costs in the planning budget for March would be closest to:

Ledezma Corporation makes a product with the following standards for direct labor and variable overhead: In May the company produced 2,500 units using 1,210 direct labor-hours.The actual variable overhead cost was $9,922.The company applies variable overhead on the basis of direct labor-hours. The variable overhead efficiency variance for May is:

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:

Controllability has little to do with whether a cost is fixed or variable.

Halm Urban Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for August was based on 3,000 meals.The diner's director has provided the following cost data to use in the budget: groceries,$3.85 per meal;kitchen operations,$4,600 per month plus $1.15 per meal;administrative expenses,$3,800 per month plus $0.85 per meal;and fundraising expenses,$1,600 per month.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 August.Label each variance as favorable (F)or unfavorable (U).

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead.Variable manufacturing overhead standards are based on machine-hours. The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month?

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

The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: The direct materials purchases variance is computed when the materials are purchased. Required: a.What is the materials price variance for the month? b.What is the materials quantity variance for the month?

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 materials price variance for April is:

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 wages and salaries in the planning budget for May would be closest to:

The following data have been provided by Gerlach Corporation,a company that produces forklift trucks: Supplies cost is an element of variable manufacturing overhead.The variable overhead efficiency variance for supplies cost is:

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

Gershon Air uses two measures of activity,flights and passengers,in the cost formulas in its budgets and performance reports.The cost formula for plane operating costs is $38,720 per month plus $2,061 per flight plus $9 per passenger.The company expected its activity in June to be 76 flights and 238 passengers,but the actual activity was 75 flights and 239 passengers.The actual cost for plane operating costs in June was $196,310.The spending variance for plane operating costs in June would be closest to:

Epley Corporation makes a product with the following standard costs: In July the company produced 3,300 units using 12,240 pounds of the direct material and 2,760 direct labor-hours.During the month,the company purchased 13,000 pounds of the direct material at a cost of $35,100.The actual direct labor cost was $51,612 and the actual variable overhead cost was $20,148. 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 July is: