Exam 10: Flexible Budgets and Performance Analysis

Niforos 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 $41,380 per month plus $2,282 per flight plus $14 per passenger. The company expected its activity in August to be 77 flights and 264 passengers, but the actual activity was 78 flights and 261 passengers. The actual cost for plane operating costs in August was $216,740. The plane operating costs in the flexible budget for August would be closest to:

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

Murphree Clinic uses client-visits as its measure of activity. During April, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,350 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for April: -The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for April would be closest to:

Murphree Clinic uses client-visits as its measure of activity. During April, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,350 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for April: -The activity variance for net operating income in April would be closest to:

Palczewski 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 5,000 units, but its actual level of activity was 4,980 units. The company has provided the following data concerning the formulas to be used in its budgeting: -The activity variance for selling and administrative expenses in December would be closest to:

During June, Defee Clinic plans for an activity level of 3,200 patient-visits. Revenue is $50.80 per patient-visit. Personnel expenses are $35,300 per month plus $16.70 per patient-visit. Medical supplies are $1,400 per month plus $8.50 per patient-visit. Occupancy expenses are $12,500 per month plus $2.60 per patient-visit. Administrative expenses are $7,200 per month plus $0.20 per patient-visit. Required: Prepare the clinic's planning budget for June.

Therrien Corporation bases its budgets on the activity measure customers served. During September, the company plans to serve 30,000 customers. The company has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare the company's planning budget for September.

Tosta 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 2,100 tenant-days, but its actual level of activity was 2,050 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May: -The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for May would be closest to:

Gorley 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 3,900 tenant-days, but its actual level of activity was 3,940 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: -The activity variance for wages and salaries in February would be closest to:

Hoeper Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 2,600 client-visits, but its actual level of activity was 2,570 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January: -The spending variance for medical supplies in January would be closest to:

Mashore 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 April, the company budgeted for 495 guests and 187 jeeps. The company's income statement showing the actual results for the month appears below: Required: Prepare a report showing the company's activity variances for April. Label each variance as favorable (F) or unfavorable (U).

Cotty Clinic uses client-visits as its measure of activity. During March, the clinic budgeted for 3,000 client-visits, but its actual level of activity was 2,970 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for March: -The occupancy expenses in the flexible budget for March would be closest to:

Smithson Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,270 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for May: -The net operating income in the flexible budget for May would be closest to:

Gladstone Footwear Corporation's flexible budget cost formula for supplies, a variable cost, is $2.83 per unit of output. The company's flexible budget performance report for last month showed a $9,555 unfavorable spending variance for supplies. During that month, 19,500 units were produced. Budgeted activity for the month had been 19,300 units. The actual cost per unit for indirect materials must have been 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 net operating income in the flexible budget for April would be closest to:

Jauron 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 September, the kennel budgeted for 2,300 tenant-days, but its actual level of activity was 2,310 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for September: -The wages and salaries in the planning budget for September would be closest to:

Nasson Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During August, the company budgeted for 6,700 units, but its actual level of activity was 6,730 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for August: -The net operating income in the flexible budget for August would be closest to:

Legard 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 January, the kennel budgeted for 2,600 tenant-days, but its actual level of activity was 2,620 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for January: -The revenue variance for January would be closest to:

Salling Corporation bases its budgets on machine-hours. The company's static planning budget for May appears below: -The spending variance for power costs in the flexible budget performance report for the month should be:

Dantuono Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During November, the company budgeted for 7,700 units, but its actual level of activity was 7,720 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for November: -The net operating income in the planning budget for November would be closest to: