Exam 9: Master Budgeting

Wall Corporation,which produces commercial safes,has provided the following data: Supplies cost is an element of variable manufacturing overhead. The variable overhead efficiency variance for supplies is closest to:

Bard Hotel bases its budgets on guest-days.The hotel's static budget for January appears below: The total cost at the activity level of 10,300 guest-days per month should be:

The standards for direct materials in making a certain product are 20 pounds at $0.75 per pound.During the past period,56,000 units of product were made and the materials quantity variance was $30,000 U.The number of pounds of direct material used during the period amounted to:

Rardin Corporation makes a product with the following standard costs: The company reported the following results concerning this product in July. 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.

Which of the following comparisons best isolates the impact that changes in operating efficiency have on performance?

Beakins Corporation produces a single product.The standard cost card for the product follows: During a recent period the company produced 1,200 units of product.Various costs associated with the production of these units are given below: The company records all variances at the earliest possible point in time.Variable manufacturing overhead costs are applied to products on the basis of standard direct labor-hours. The labor efficiency variance for the period is:

Gastineau Tile Installation Corporation measures its activity in terms of square feet of tile installed.Last month,the budgeted level of activity was 1,230 square feet and the actual level of activity was 1,200 square feet.The company's owner budgets for supply costs,a variable cost,at $2.70 per square foot.The actual supply cost last month was $2,690.In the company's performance report for last month,what would have been the spending variance for supply costs?

During August,Kociolek Clinic plans for an activity level of 2,800 patient-visits.The clinic uses the following revenue and cost formulas in its budgeting,where q is the number of patient-visits: Revenue: $28.20q Personnel expenses: $22,200 + $7.60q Medical supplies: $1,100 + $5.20q Occupancy expenses: $5,100 + $1.00q Administrative expenses: $3,200 + $0.40q Required: Prepare the clinic's planning budget for August.

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 overall revenue and spending variance (i.e. ,the variance for net operating income in the revenue and spending variance column on the revenue and spending variances report)for February would be closest to:

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 food and supplies in February would be closest to:

The materials price variance is computed by multiplying the difference between the actual price and the standard price by the actual quantity of materials purchased.

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 planning budget for September would be closest to:

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 rate variance for December is:

Mulberry Clinic uses patient-visits as its measure of activity.The clinic bases its budgets on the following information: Revenue should be $48.70 per patient-visit.Personnel expenses should be $27,600 per month plus $14.70 per patient-visit.Medical supplies should be $1,000 per month plus $10.10 per patient-visit.Occupancy expenses should be $9,500 per month plus $2.40 per patient-visit.Administrative expenses should be $3,800 per month plus $0.10 per patient-visit. The clinic reported the following actual results for August: Required: Prepare a report showing the clinic's revenue and spending variances for August.Label each variance as favorable (F)or unfavorable (U).

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 spending variance for selling and administrative expense in December would be closest to:

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 flexible budget for July would be closest to:

Which of the following would produce a labor rate variance?

Dehnert Midwifery's cost formula for its wages and salaries is $2,030 per month plus $409 per birth.For the month of May,the company planned for activity of 112 births,but the actual level of activity was 114 births.The actual wages and salaries for the month was $50,800.The wages and salaries in the planning budget for May would be closest to:

Hettinger Hospital bases its budgets on patient-visits.The hospital's static budget for March appears below: The total fixed cost at the activity level of 7,700 patient-visits per month should be:

Buonocore Clinic uses client-visits as its measure of activity.During August,the clinic budgeted for 2,800 client-visits,but its actual level of activity was 2,770 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: