Exam 10: Flexible Budgets and Performance Analysis

Kuczenski Corporation's cost formula for its manufacturing overhead is $45,700 per month plus $53 per machine-hour. For the month of March, the company planned for activity of 6,200 machine-hours, but the actual level of activity was 6,150 machine-hours. The actual manufacturing overhead for the month was $373,630. -The spending variance for manufacturing overhead in March would be closest to:

Mah Clinic uses client-visits as its measure of activity. During April, the clinic budgeted for 3,800 client-visits, but its actual level of activity was 3,750 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: -The medical supplies in the flexible budget for April would be closest to:

Weisgarber Clinic uses client-visits as its measure of activity. During August, the clinic budgeted for 3,900 client-visits, but its actual level of activity was 3,850 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for August: -The administrative expenses in the planning budget for August would be closest to:

Fasano Clinic bases its budgets on the activity measure patient-visits. During April, the clinic planned for 3,800 patient-visits. The clinic has provided the following data concerning the formulas it uses in its budgeting: The clinic has also furnished its income statement for April: Required: Prepare a report showing the clinic's activity variances for April.

Burget Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 2,100 client-visits, but its actual level of activity was 2,110 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for July: -The spending variance for medical supplies in July would be closest to:

Mulry Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for September was based on 3,000 meals, but the diner actually served 2,800 meals. The diner's director has provided the following cost data to use in the budget: groceries, $2.45 per meal; kitchen operations, $4,900 per month plus $1.65 per meal; administrative expenses, $3,600 per month plus $0.60 per meal; and fundraising expenses, $1,200 per month. The director has also provided the diner's statement of actual expenses for the month: Required: Prepare a report showing the activity variances for each of the expenses and for total expenses for September.

Bessey Hospital bases its budgets on patient-visits. The hospital's static planning budget for January appears below: -The spending variance for laundry costs in the flexible budget performance report for the month is:

Ruvolo 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 February, the company budgeted for 436 guests and 162 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 February. Label each variance as favorable (F) or unfavorable (U).

Barringer Manufacturing Corporation has prepared the following overhead budget for next month. The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 7,900 machine-hours rather than 7,800 machine-hours?

Dwelmont Hotel bases its budgets on guest-days. The hotel's static budget for May appears below: -The total variable cost at the activity level of 2,600 guest-days per month should be:

Drabant 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 2,000 tenant-days, but its actual level of activity was 2,040 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February: -The facility expenses in the flexible budget for February would be closest to:

Mccarter Clinic bases its budgets on the activity measure patient-visits. During April, the clinic planned for 2,700 patient-visits, but its actual level of activity was 2,400 patient-visits. The clinic has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare a report showing the clinic's activity variances for April. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

Entler Framing's cost formula for its supplies cost is $2,250 per month plus $16 per frame. For the month of June, the company planned for activity of 502 frames, but the actual level of activity was 497 frames. The actual supplies cost for the month was $10,580. The supplies cost in the planning budget for June would be closest to:

Turiano Corporation bases its budgets on machine-hours. The company's static planning budget for November appears below: Required: Prepare a flexible budget for 9,800 machine-hours per month.

Luc 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 5,000 units, but its actual level of activity was 4,950 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for February: -The selling and administrative expenses in the planning budget for February would be closest to:

Spraque 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 $40,520 per month plus $2,733 per flight plus $11 per passenger. The company expected its activity in June to be 71 flights and 207 passengers, but the actual activity was 70 flights and 205 passengers. The actual cost for plane operating costs in June was $239,580. -The activity variance for plane operating costs in June would be closest to:

Posson Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $210 per month plus $96 per job plus $20 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in March to be 20 jobs and 162 meals, but the actual activity was 17 jobs and 164 meals. The actual cost for catering supplies in March was $4,990. The spending variance for catering supplies in March would be closest to:

A flexible budget performance report should contain fixed as well as variable and mixed costs.

A flexible budget is a budget that:

Hausman Hospital bases its budgets on patient-visits. The hospital's static planning budget for October appears below: Required: Prepare a flexible budget for 8,900 patient-visits per month.