Exam 9: Master Budgeting

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:

Novelli Corporation makes a product whose variable overhead standards are based on direct labor-hours.The quantity standard is 0.6 hours per unit.The variable overhead rate standard is $5.00 per hour.In September the company produced 1,600 units using 950 direct labor-hours.The actual variable overhead rate was $5.10 per hour. The variable overhead efficiency variance for September is:

The following data have been provided by Leason Corporation: Required: Compute the variable overhead rate variances for lubricants and for supplies.Indicate whether each of the variances is favorable (F)or unfavorable (U).Show your work!

Gilson Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During April,the company budgeted for 5,100 units,but its actual level of activity was 5,060 units.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: The spending variance for direct materials in April would be closest to:

The following data for March have been provided by Fickling Corporation,a producer of precision drills for oil exploration: Required: Compute the variable overhead rate variances for indirect labor and for power for March.Indicate whether each of the variances is favorable (F)or unfavorable (U).Show your work!

Illescas Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During December,the company budgeted for 6,400 units,but its actual level of activity was 6,440 units.The company has provided the following data concerning the formulas to be used in its budgeting: The selling and administrative expenses in the planning budget for December would be closest to:

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 labor rate variance for May is:

Chirico Clinic uses client-visits as its measure of activity.During February,the clinic budgeted for 2,500 client-visits,but its actual level of activity was 2,550 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 net operating income in the flexible budget for February would be closest to:

Lartey Corporation's cost formula for its selling and administrative expense is $22,200 per month plus $27 per unit.For the month of December,the company planned for activity of 5,300 units,but the actual level of activity was 5,270 units.The actual selling and administrative expense for the month was $168,150. The selling and administrative expense in the flexible budget for December would be closest to:

During October,Haubold Corporation budgeted for 30,000 customers,but actually served 29,000 customers.Revenue should be $3.80 per customer served.Wages and salaries should be $31,200 per month plus $1.40 per customer served.Supplies should be $0.70 per customer served.Insurance should be $8,500 per month.Miscellaneous expenses should be $3,700 per month plus $0.10 per customer served. Required: Prepare the company's flexible budget for October based on the actual level of activity for the month.

Merle Corporation applies manufacturing overhead to products on the basis of standard machine-hours.For the most recent month,the company based its budget on 4,000 machine-hours.Budgeted and actual overhead costs for the month appear below: The company actually worked 3,690 machine-hours during the month.The standard hours allowed for the actual output were 3,620 machine-hours for the month.What was the overall variable overhead efficiency variance for the month?

Coderre 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 7,800 units,but its actual level of activity was 7,780 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 revenue variance for July would be closest to:

Cicchetti Corporation uses customers served as its measure of activity.The following report compares the planning budget to the actual operating results for the month of December: Required: Prepare a report showing the company's revenue and spending variances for December.Label each variance as favorable (F)or unfavorable (U).

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 materials quantity variance for June is:

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 rate variance for May is:

At Cady Corporation,maintenance is a variable overhead cost that is based on machine-hours.The performance report for June showed that actual maintenance costs totaled $9,600 and that the associated rate variance was $400 unfavorable.If 8,000 machine-hours were actually worked during June,the standard maintenance cost per machine-hour was:

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 labor efficiency variance for January is:

During a recent lengthy strike at Morell Manufacturing Company,management replaced striking assembly line workers with office workers.The assembly line workers had been paid $18 per hour while the office workers are only paid $10 per hour.What is the most likely effect on the labor variances in the first month of this strike?

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. What is the materials price variance for the month?

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 quantity variance for part XBEZ52 was: