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Exam 9: Flexible Budgets and Performance Analysis

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Question 71

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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 manufacturing overhead in April would be closest to:

A) $330 U
B) $330 F
C) $254 F
D) $254 U

E) All of the above
F) B) and D)

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Question 72

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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:

A) $47, 838
B) $50, 800
C) $49, 909
D) $48, 656

E) A) and B)
F) A) and C)

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Question 73

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Monard Clinic uses client-visits as its measure of activity.During January, the clinic budgeted for 3, 700 client-visits, but its actual level of activity was 3, 710 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting: Actual results for January: The activity variance for net operating income in January would be closest to:

Rothrock Clinic uses patient-visits as its measure of activity.During December, the clinic budgeted for 3, 400 patient-visits, but its actual level of activity was 3, 200 patient-visits.The clinic bases its budgets on the following information: Revenue should be $26.20 per patient-visit.Personnel expenses should be $28, 200 per month plus $6.70 per patient-visit.Medical supplies should be $1, 500 per month plus $3.30 per patient-visit.Occupancy expenses should be $6, 800 per month plus $1.00 per patient-visit.Administrative expenses should be $5, 000 per month plus $0.20 per patient-visit.The clinic reported the following actual results for December: Required: Prepare the clinic's flexible budget performance report for December.Label each variance as favorable (F)or unfavorable (U).

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 net operating income in the planning budget for July would be closest to:

Mcindoe Clinic bases its budgets on the activity measure patient-visits.During May, the clinic planned for an activity level of 3, 200 patient-visits, but the activity level was actually 3, 600 patient-visits.The clinic has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare the clinic's flexible budget for May based on the actual level of activity for the month.

Gesmondi Corporation bases its budgets on the activity measure customers served.During October, the company planned to serve 24, 000 customers, but actually served 28, 000 customers.The company has provided the following data concerning the formulas it uses in its budgeting: Required: Prepare a report showing the company's activity variances for October.Indicate in each case whether the variance is favorable (F)or unfavorable (U).

Ruetz Clinic uses client-visits as its measure of activity.During November, the clinic budgeted for 2, 500 client-visits, but its actual level of activity was 2, 520 client-visits.The clinic has provided the following data concerning the formulas to be used in its budgeting: The occupancy expenses in the flexible budget for November would be closest to:

If the actual level of activity is 4% less than planned, then the variable costs in the static budget should be decreased by 4% before comparing them to actual costs.

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:

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 selling and administrative expenses in the planning budget for January would be closest to:

Jiminian Clinic uses client-visits as its measure of activity.During March, the clinic budgeted for 3, 700 client-visits, but its actual level of activity was 3, 660 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Actual results for March: The medical supplies in the flexible budget for March would be closest to:

Ameigh Tech is a for-profit vocational school.The school bases its budgets on two measures of activity (i.e. , cost drivers), namely student and course.The school uses the following data in its budgeting: In June, the school budgeted for 1, 890 students and 146 courses.The actual activity for the month was 2, 290 students and 151 courses. Required: Prepare a report showing the school's activity variances for June.Label each variance as favorable (F)or unfavorable (U).

Lantagne Clinic uses client-visits as its measure of activity.During May, the clinic budgeted for 3, 800 client-visits, but its actual level of activity was 3, 820 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Actual results for May: The net operating income in the planning budget for May 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 activity variance for selling and administrative expense in December would be closest to:

Nicolini 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 October, the kennel budgeted for 2, 200 tenant-days, but its actual level of activity was 2, 250 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for October: Data used in budgeting: Actual results for October: The administrative expenses in the planning budget for October would be closest to:

Lehnertz 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 7, 100 units, but its actual level of activity was 7, 150 units.The company 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 manufacturing overhead in the flexible budget for February would be closest to:

Bard Hotel bases its budgets on guest-days.The hotel's static budget for January appears below: The total fixed cost at the activity level of 10, 600 guest-days per month should be:

Branner Corporation uses customers served as its measure of activity.During June, the company budgeted for 26, 000 customers, but actually served 23, 000 customers.The company bases its budgets on the following information: Revenue should be $2.80 per customer served.Wages and salaries should be $22, 100 per month plus $0.70 per customer served.Supplies should be $0.50 per customer served.Insurance should be $5, 200 per month.Miscellaneous expenses should be $2, 100 per month plus $0.30 per customer served.The company reported the following actual results for June: Revenue $63, 800 Wages and salaries $37, 100 Supplies $9, 900 Insurance $5, 400 Miscellaneous expense $6, 200 Required: Prepare the company's flexible budget performance report for June.Label each variance as favorable (F)or unfavorable (U).

Lehnertz 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 7, 100 units, but its actual level of activity was 7, 150 units.The company 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: