Exam 9: Master Budgeting

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 personnel expenses in the planning budget for July would be closest to:

Comparing a static planning budget to actual costs is a good way to assess whether variable costs are under control.

The standard cost per unit is computed by dividing the standard quantity or hours by the standard price or rate.

The standards for product F88W specify 3.4 direct labor-hours per unit at $13.00 per direct labor-hour.Last month 800 units of product F88W were produced using 2,500 direct labor-hours at a total direct labor wage cost of $30,500. Required: a.What was the labor rate variance for the month? b.What was the labor efficiency variance for the month?

Welcome Corporation produces metal telephone poles.In the most recent month,the company budgeted production of 4,100 poles.Actual production was 4,400 poles.According to standards,each pole requires 7.0 machine-hours.The actual machine-hours for the month were 31,140 machine-hours.The standard variable manufacturing overhead rate is $2.50 per machine-hour.The actual variable manufacturing overhead cost for the month was $83,787.The variable overhead efficiency variance is:

Zenon 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 July,the kennel budgeted for 3,300 tenant-days,but its actual level of activity was 3,260 tenant-days.The kennel 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 facility expenses in the flexible budget for July would be closest to:

Taccone Corporation makes a product that has the following direct labor standards: In February the company produced 4,100 units using 1,120 direct labor-hours.The actual direct labor rate was $20.40 per hour. The labor efficiency variance for February is:

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 rate variance for the month?

The Maxwell Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours.The following data are available for July: • Actual variable manufacturing overhead cost incurred: $22,620 • Actual machine-hours worked: 1,600 hours • Variable overhead rate variance: $3,420 Unfavorable • Total variable overhead spending variance: $4,620 Unfavorable The variable overhead efficiency variance for July is:

The following data have been provided by Petri Corporation: Indirect labor and power are both elements of variable manufacturing overhead. The variable overhead rate variance for indirect labor is closest to:

Sholette Manufacturing Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs)at $5.00 per MH.During the month,the actual total variable manufacturing overhead was $22,540 and the actual level of activity for the period was 4,600 MHs.What was the variable overhead rate variance for the month?

Bard Hotel bases its budgets on guest-days.The hotel's static budget for January appears below: The total variable cost at the activity level of 10,200 guest-days per month should be:

Zee Corporation has developed the following cost standards for the production of its leather backpacks: Variable overhead at Zee is applied on the basis of direct labor hours.The actual results for last month were as follows: The direct materials purchases variance is computed when the materials are purchased. Required: Compute the following variances for Zee. a.Materials price variance. b.Materials quantity variance. c.Labor efficiency variance. d.Variable overhead rate variance.

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 direct labor in the planning budget for December would be closest to:

Peixoto Framing's cost formula for its supplies cost is $1,150 per month plus $14 per frame.For the month of July,the company planned for activity of 556 frames,but the actual level of activity was 555 frames.The actual supplies cost for the month was $9,190.The supplies cost in the planning budget for July would be closest to:

The standard cost card for a product indicates that one unit of the product requires 8 kilograms of a raw material at $0.80 per kilogram.The production of the product in April was 870 units,but production had been budgeted for 850 units.During April,8,200 kilograms of the raw material were purchased for $6,888 and 7,150 kilograms of the raw material were used in production.The material variances for April were:

Letts Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During January,the company budgeted for 7,000 units,but its actual level of activity was 6,970 units.The company has provided the following data concerning the formulas to be used in its budgeting: The direct materials in the flexible budget for January would be closest to:

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 labor efficiency variance for May is:

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?

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 variable overhead efficiency variance for March is: