10 Flexible BUdgets & Performance Analysis

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Professional Exam Adapted

LO6: Common errors

LO5: More than one cost driver

LO4: Flexible budget performance report

LO3: Revenue and spending variances

LO2: Activity variances

LO1: Prepare a flexible budget

Question Type T/F T/F T/F T/F T/F T/F T/F T/F T/F T/F T/F T/F T/F T/F T/F Conceptual M/C

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ID 2/e: 9-2 5/e: 10-6 11/11/2007 A1 11/11/2007 A9 11/11/2007 A12 11/11/2007 A17 11/11/2007 A22 11/11/2007 A27 11/11/2007 A33 11/11/2007 A38 11/11/2007 A42 11/11/2007 A46 11/11/2007 A4 11/11/2007 A51 11/11/2007 A55

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CIMA E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N.

CIMA, Nov 1996, Stage 2, Operational Cost Accounting , Q1.3


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E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N. E.N.

Chapter 010, Flexible Budgets and Performance Analysis 104 105 106 107 108 109 1010 1011 1012 1013 1014 1015 1016 1017 1018 1019 1020 1021 1022 10-

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Chapter 010, Flexible Budgets and Performance Analysis 23 1024 1025 1026 1027 1028 1029 1030 1031 1032 1033 1034 1035 1036 1037 1038 1039 1040 1041 1042

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Chapter 010, Flexible Budgets and Performance Analysis 1043 1044 1045 1046 1047 1048 1049 1050 1051 1052 1053

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11/17/2007 MC CF1 9/22/2004 Multi MC C3 9/22/2004 Multi MC D3 9/22/2004 Multi MC E3 11/17/2007 Multi MC EA1 11/17/2007 Multi MC EB1 11/12/2007 Problem AG1 11/12/2007 Problem AH1 11/12/2007 Problem AI1 11/12/2007 Problem AJ1 11/12/2007 Problem BG1 11/12/2007 Problem BH1 11/12/2007 Problem BI1 11/13/2007 Problem BJ1 11/13/2007

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Chapter 010, Flexible Budgets and Performance Analysis True / False Questions 1. The main difference between a flexible budget and a static budget is that a flexible budget does not contain fixed costs. True False

2. A problem with directly comparing a static planning budget to actual costs is that this comparison fails to distinguish between differences in costs that are due to changes in activity and differences that are due to how well costs were controlled. True False

3. A planning budget is prepared before the period begins and is valid for only the planned level of activity. True False

4. A flexible budget is an estimate of what revenues and costs should have been, given the level of activity that had been planned for the period. True False

5. An unfavorable activity variance for a cost indicates that spending was higher than it should have been for the actual level of activity for the period. True False

6. The activity variance for revenue is unfavorable if the actual revenue for the period is less than the revenue in the static planning budget. True False

10-10

Chapter 010, Flexible Budgets and Performance Analysis 7. The revenue and spending variances are the differences between the static planning budget and the flexible budget. True False

8. A revenue variance is unfavorable if the actual revenue is less than what the revenue should have been for the actual level of activity for the period. True False

9. When the activity measure is the number of units sold, the revenue variance is unfavorable if the average actual selling price is less than expected. True False

10. A favorable spending variance occurs when the actual cost is less than the amount of that cost in the flexible budget. True False

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

12. It may be easier to control fixed costs than variable costs. True False

13. A static planning budget is suitable for planning and for evaluating how well costs are controlled. True False

10-11

Chapter 010, Flexible Budgets and Performance Analysis 14. If the actual level of activity is 4% less than planned, then the costs in the static budget should be reduced by 4% before comparing them to actual costs. True False

15. If the actual level of activity is 4% more than planned, then the fixed costs in the static budget should be increased by 4% before comparing them to actual costs. True False

Multiple Choice Questions 16. A flexible budget: A. classifies budget requests by activity and estimates the benefits arising from each activity. B. presents a statement of expectations for a period of time but does not present a firm commitment. C. presents the plan for only one level of activity and does not adjust to changes in the level of activity. D. presents the plan for a range of activity so that the plan can be adjusted for changes in activity levels.

17. A flexible budget is a budget that: A. is updated with actual costs as they occur during the period. B. is updated to reflect the actual level of activity during the period. C. is prepared using a computer spreadsheet application. D. contains only variable production costs.

18. Which of the following comparisons best isolates the impact that changes in prices of inputs and outputs have on performance? A. static planning budget and flexible budget B. static planning budget and actual results C. flexible budget and actual results D. master budget and static planning budget

10-12

Chapter 010, Flexible Budgets and Performance Analysis 19. Marchi Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below:

The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 70 guests? A. $42,460.00 B. $6,620.00 C. $7,086.15 D. $6,580.00

10-13

Chapter 010, Flexible Budgets and Performance Analysis 20. 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? A. $110,710.00 B. $109,620.00 C. $110,868.00 D. $111,025.38

10-14

Chapter 010, Flexible Budgets and Performance Analysis 21. Placek Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below:

The total overhead cost at an activity level of 7,700 patient-visits per month should be: A. $129,550 B. $121,720 C. $129,100 D. $137,830

22. Dike Hotel bases its budgets on guest-days. The hotel's static budget for June appears below:

The total overhead cost at an activity level of 8,400 guest-days per month should be: A. $159,440 B. $149,650 C. $160,430 D. $172,200

10-15

Chapter 010, Flexible Budgets and Performance Analysis 23. Blackwelder Snow Removal's cost formula for its vehicle operating cost is $1,240 per month plus $348 per snow-day. For the month of December, the company planned for activity of 12 snow-days, but the actual level of activity was 14 snow-days. The actual vehicle operating cost for the month was $6,330. The vehicle operating cost in the planning budget for December would be closest to: A. $5,426 B. $6,112 C. $5,416 D. $6,330

24. Ofarrell Snow Removal's cost formula for its vehicle operating cost is $1,840 per month plus $377 per snow-day. For the month of November, the company planned for activity of 14 snow-days, but the actual level of activity was 19 snow-days. The actual vehicle operating cost for the month was $9,280. The vehicle operating cost in the flexible budget for November would be closest to: A. $9,003 B. $7,118 C. $9,280 D. $9,660

25. Guilbault Midwifery's cost formula for its wages and salaries is $2,340 per month plus $154 per birth. For the month of June, the company planned for activity of 115 births, but the actual level of activity was 112 births. The actual wages and salaries for the month was $19,530. The wages and salaries in the planning budget for June would be closest to: A. $19,530 B. $19,588 C. $20,053 D. $20,050

10-16

Chapter 010, Flexible Budgets and Performance Analysis 26. Dewberry Midwifery's cost formula for its wages and salaries is $1,960 per month plus $429 per birth. For the month of December, the company planned for activity of 128 births, but the actual level of activity was 130 births. The actual wages and salaries for the month was $56,020. The wages and salaries in the flexible budget for December would be closest to: A. $57,761 B. $57,730 C. $56,020 D. $56,872

27. 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: A. $10,580 B. $10,282 C. $10,686 D. $10,202

28. Rising Framing's cost formula for its supplies cost is $2,210 per month plus $10 per frame. For the month of January, the company planned for activity of 710 frames, but the actual level of activity was 705 frames. The actual supplies cost for the month was $9,500. The supplies cost in the flexible budget for January would be closest to: A. $9,260 B. $9,244 C. $9,500 D. $9,310

10-17

Chapter 010, Flexible Budgets and Performance Analysis 29. Naval 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 $430 per month plus $99 per job plus $10 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 12 jobs and 126 meals, but the actual activity was 9 jobs and 124 meals. The actual cost for catering supplies in March was $2,550. The catering supplies in the planning budget for March would be closest to: A. $3,400 B. $2,561 C. $2,550 D. $2,878

30. Johannsen 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 $310 per month plus $103 per job plus $23 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 February to be 28 jobs and 187 meals, but the actual activity was 26 jobs and 192 meals. The actual cost for catering supplies in February was $7,620. The catering supplies in the flexible budget for February would be closest to: A. $7,495 B. $7,404 C. $7,620 D. $6,960

31. Venanzi 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 $40,720 per month plus $2,646 per flight plus $11 per passenger. The company expected its activity in September to be 62 flights and 288 passengers, but the actual activity was 64 flights and 289 passengers. The actual cost for plane operating costs in September was $214,430. The activity variance for plane operating costs in September would be closest to: A. $6,490 U B. $5,303 F C. $6,490 F D. $5,303 U

10-18

Chapter 010, Flexible Budgets and Performance Analysis 32. Kimbril 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 $530 per month plus $91 per job plus $12 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 January to be 27 jobs and 174 meals, but the actual activity was 31 jobs and 173 meals. The actual cost for catering supplies in January was $5,330. The activity variance for catering supplies in January would be closest to: A. $255 F B. $255 U C. $352 F D. $352 U

33. Portsche Snow Removal's cost formula for its vehicle operating cost is $2,310 per month plus $317 per snow-day. For the month of November, the company planned for activity of 18 snow-days, but the actual level of activity was 20 snow-days. The actual vehicle operating cost for the month was $8,730. The activity variance for vehicle operating cost in November would be closest to: A. $714 U B. $714 F C. $634 F D. $634 U

34. Reuer Midwifery's cost formula for its wages and salaries is $2,900 per month plus $475 per birth. For the month of March, the company planned for activity of 116 births, but the actual level of activity was 117 births. The actual wages and salaries for the month was $56,270. The activity variance for wages and salaries in March would be closest to: A. $1,730 U B. $475 F C. $475 U D. $1,730 F

10-19

Chapter 010, Flexible Budgets and Performance Analysis 35. Embertson Framing's cost formula for its supplies cost is $1,350 per month plus $16 per frame. For the month of June, the company planned for activity of 816 frames, but the actual level of activity was 812 frames. The actual supplies cost for the month was $14,680. The activity variance for supplies cost in June would be closest to: A. $64 U B. $274 U C. $64 F D. $274 F

36. Lapinsky 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 $31,400 per month plus $2,148 per flight plus $7 per passenger. The company expected its activity in April to be 89 flights and 261 passengers, but the actual activity was 84 flights and 260 passengers. The actual cost for plane operating costs in April was $204,810. The spending variance for plane operating costs in April would be closest to: A. $8,842 U B. $19,589 F C. $19,589 U D. $8,842 F

37. 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. $380 F B. $132 U C. $132 F D. $380 U

10-20

Chapter 010, Flexible Budgets and Performance Analysis 38. Dunklin Medical Clinic measures its activity in terms of patient-visits. Last month, the budgeted level of activity was 1,620 patient-visits and the actual level of activity was 1,540 patient-visits. The cost formula for administrative expenses is $3.20 per patient-visit plus $14,300 per month. The actual administrative expense was $21,050. In the clinic's flexible budget performance report for last month, the spending variance for administrative expenses was: A. $118 F B. $256 F C. $1,566 U D. $1,822 U

39. Brattain 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 1,140 square feet. The company's owner budgets for supply costs, a variable cost, at $2.10 per square foot. The actual supply cost last month was $3,260. In the company's flexible budget performance report for last month, what would have been the spending variance for supply costs? A. $257 F B. $866 U C. $677 U D. $189 F

40. Cahalane Natural Dying Corporation measures its activity in terms of skeins of yarn dyed. Last month, the budgeted level of activity was 11,600 skeins and the actual level of activity was 12,000 skeins. The company's owner budgets for dye costs, a variable cost, at $0.31 per skein. The actual dye cost last month was $3,540. In the company's flexible budget performance report for last month, what would have been the spending variance for dye costs? A. $118 U B. $124 U C. $56 F D. $180 F

10-21

Chapter 010, Flexible Budgets and Performance Analysis 41. 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: A. $3.32 B. $3.81 C. $2.83 D. $3.85

42. Velten Corporation's flexible budget performance report for last month shows that actual indirect materials cost, a variable cost, was $45,198 and that the spending variance for indirect materials cost was $9,114 favorable. During that month, the company worked 18,600 machinehours. Budgeted activity for the month had been 19,000 machine-hours. The cost formula per machine-hour for indirect materials cost must have been closest to: A. $1.90 B. $2.86 C. $1.94 D. $2.92

43. Lesinski Snow Removal's cost formula for its vehicle operating cost is $1,770 per month plus $483 per snow-day. For the month of February, the company planned for activity of 19 snow-days, but the actual level of activity was 24 snow-days. The actual vehicle operating cost for the month was $13,070. The spending variance for vehicle operating cost in February would be closest to: A. $2,123 U B. $292 F C. $2,123 F D. $292 U

10-22

Chapter 010, Flexible Budgets and Performance Analysis 44. Harville Midwifery's cost formula for its wages and salaries is $1,610 per month plus $199 per birth. For the month of March, the company planned for activity of 118 births, but the actual level of activity was 122 births. The actual wages and salaries for the month was $25,430. The spending variance for wages and salaries in March would be closest to: A. $458 F B. $338 U C. $458 U D. $338 F

45. Olivier Framing's cost formula for its supplies cost is $2,870 per month plus $16 per frame. For the month of January, the company planned for activity of 533 frames, but the actual level of activity was 534 frames. The actual supplies cost for the month was $11,080. The spending variance for supplies cost in January would be closest to: A. $334 U B. $334 F C. $318 U D. $318 F

46. Elizarraras 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 $39,820 per month plus $2,938 per flight plus $8 per passenger. The company expected its activity in June to be 64 flights and 229 passengers, but the actual activity was 66 flights and 225 passengers. The actual cost for plane operating costs in June was $234,570. The plane operating costs in the planning budget for June would be closest to: A. $229,684 B. $227,462 C. $234,570 D. $235,528

10-23

Chapter 010, Flexible Budgets and Performance Analysis 47. 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: A. $220,790 B. $223,030 C. $223,657 D. $216,740

Pollica Corporation's cost formula for its selling and administrative expense is $11,400 per month plus $94 per unit. For the month of March, the company planned for activity of 5,700 units, but the actual level of activity was 5,660 units. The actual selling and administrative expense for the month was $522,860.

48. The selling and administrative expense in the planning budget for March would be closest to: A. $522,860 B. $547,200 C. $543,440 D. $526,555

49. The selling and administrative expense in the flexible budget for March would be closest to: A. $547,200 B. $522,860 C. $543,360 D. $543,440

10-24

Chapter 010, Flexible Budgets and Performance Analysis 50. The activity variance for selling and administrative expense in March would be closest to: A. $24,340 F B. $24,340 U C. $3,760 U D. $3,760 F

51. The spending variance for selling and administrative expense in March would be closest to: A. $20,580 F B. $24,340 U C. $24,340 F D. $20,580 U

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.

52. The manufacturing overhead in the planning budget for March would be closest to: A. $373,630 B. $371,650 C. $376,668 D. $374,300

53. The manufacturing overhead in the flexible budget for March would be closest to: A. $371,650 B. $371,281 C. $373,630 D. $374,300

10-25

Chapter 010, Flexible Budgets and Performance Analysis 54. The activity variance for manufacturing overhead in March would be closest to: A. $670 U B. $670 F C. $2,650 F D. $2,650 U

55. The spending variance for manufacturing overhead in March would be closest to: A. $670 F B. $1,980 U C. $1,980 F D. $670 U

Kaaihue Detailing's cost formula for its materials and supplies is $2,750 per month plus $17 per vehicle. For the month of April, the company planned for activity of 95 vehicles, but the actual level of activity was 135 vehicles. The actual materials and supplies for the month was $4,850.

56. The materials and supplies in the planning budget for April would be closest to: A. $4,850 B. $5,045 C. $3,413 D. $4,365

57. The materials and supplies in the flexible budget for April would be closest to: A. $6,203 B. $4,850 C. $4,365 D. $5,045

10-26

Chapter 010, Flexible Budgets and Performance Analysis 58. The activity variance for materials and supplies in April would be closest to: A. $680 U B. $485 F C. $680 F D. $485 U

59. The spending variance for materials and supplies in April would be closest to: A. $195 F B. $485 F C. $195 U D. $485 U

Deleston Boat Wash's cost formula for its cleaning equipment and supplies is $2,150 per month plus $21 per boat. For the month of September, the company planned for activity of 79 boats, but the actual level of activity was 39 boats. The actual cleaning equipment and supplies for the month was $3,110.

60. The cleaning equipment and supplies in the planning budget for September would be closest to: A. $3,110 B. $6,300 C. $2,969 D. $3,809

61. The cleaning equipment and supplies in the flexible budget for September would be closest to: A. $1,880 B. $3,110 C. $3,809 D. $2,969

10-27

Chapter 010, Flexible Budgets and Performance Analysis 62. The activity variance for cleaning equipment and supplies in September would be closest to: A. $840 F B. $699 F C. $699 U D. $840 U

63. The spending variance for cleaning equipment and supplies in September would be closest to: A. $699 F B. $699 U C. $141 F D. $141 U

Werber Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 2,700 client-visits, but its actual level of activity was 2,730 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January:

10-28

Chapter 010, Flexible Budgets and Performance Analysis 64. The activity variance for personnel expenses in January would be closest to: A. $661 U B. $261 U C. $261 F D. $661 F

65. The activity variance for administrative expenses in January would be closest to: A. $12 F B. $8 F C. $12 U D. $8 U

66. The activity variance for net operating income in January would be closest to: A. $2,019 U B. $2,019 F C. $489 F D. $489 U

10-29

Chapter 010, Flexible Budgets and Performance Analysis Feiner Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,220 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting:

67. The activity variance for personnel expenses in December would be closest to: A. $4,024 F B. $466 F C. $466 U D. $4,024 U

68. The activity variance for administrative expenses in December would be closest to: A. $8 F B. $162 F C. $162 U D. $8 U

69. The activity variance for net operating income in December would be closest to: A. $690 U B. $9,670 U C. $690 F D. $9,670 F

10-30

Chapter 010, Flexible Budgets and Performance Analysis Grundhoefer 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 April, the kennel budgeted for 2,000 tenantdays, but its actual level of activity was 1,990 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for April:

70. The activity variance for wages and salaries in April would be closest to: A. $66 F B. $564 U C. $564 F D. $66 U

71. The activity variance for administrative expenses in April would be closest to: A. $1 F B. $79 F C. $79 U D. $1 U

10-31

Chapter 010, Flexible Budgets and Performance Analysis 72. The activity variance for net operating income in April would be closest to: A. $141 U B. $2,651 U C. $2,651 F D. $141 F

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 tenantdays, 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:

73. The activity variance for wages and salaries in February would be closest to: A. $1,152 U B. $1,152 F C. $292 U D. $292 F

74. The activity variance for administrative expenses in February would be closest to: A. $18 U B. $12 U C. $18 F D. $12 F

10-32

Chapter 010, Flexible Budgets and Performance Analysis 75. The activity variance for net operating income in February would be closest to: A. $368 F B. $368 U C. $632 F D. $632 U

Enriques 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 4,990 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for February:

76. The activity variance for direct labor in February would be closest to: A. $61 U B. $1,081 U C. $61 F D. $1,081 F

10-33

Chapter 010, Flexible Budgets and Performance Analysis 77. The activity variance for selling and administrative expenses in February would be closest to: A. $1,308 F B. $1,308 U C. $2 U D. $2 F

78. The activity variance for net operating income in February would be closest to: A. $2,716 F B. $2,716 U C. $176 U D. $176 F

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:

79. The activity variance for direct labor in December would be closest to: A. $180 U B. $70 F C. $70 U D. $180 F

10-34

Chapter 010, Flexible Budgets and Performance Analysis 80. The activity variance for selling and administrative expenses in December would be closest to: A. $14 U B. $14 F C. $1,206 F D. $1,206 U

81. The activity variance for net operating income in December would be closest to: A. $2,372 U B. $328 F C. $2,372 F D. $328 U

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:

10-35

Chapter 010, Flexible Budgets and Performance Analysis 82. The revenue variance for July would be closest to: A. $2,581 F B. $2,110 U C. $2,110 F D. $2,581 U

83. The spending variance for medical supplies in July would be closest to: A. $580 U B. $645 U C. $645 F D. $580 F

84. The spending variance for occupancy expenses in July would be closest to: A. $265 F B. $280 U C. $280 F D. $265 U

85. 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 July would be closest to: A. $4,508 F B. $4,290 U C. $4,290 F D. $4,508 U

10-36

Chapter 010, Flexible Budgets and Performance Analysis Razor 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 November, the kennel budgeted for 3,000 tenantdays, but its actual level of activity was 3,010 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for November:

86. The revenue variance for November would be closest to: A. $1,607 U B. $1,910 U C. $1,607 F D. $1,910 F

87. The spending variance for expendables in November would be closest to: A. $240 F B. $354 F C. $240 U D. $354 U

10-37

Chapter 010, Flexible Budgets and Performance Analysis 88. The spending variance for facility expenses in November would be closest to: A. $416 U B. $416 F C. $390 F D. $390 U

89. 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 November would be closest to: A. $3,520 F B. $3,428 U C. $3,520 U D. $3,428 F

Vandall 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 7,300 units, but its actual level of activity was 7,340 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for April:

10-38

Chapter 010, Flexible Budgets and Performance Analysis 90. The revenue variance for April would be closest to: A. $4,274 F B. $5,690 F C. $5,690 U D. $4,274 U

91. The spending variance for direct materials in April would be closest to: A. $210 U B. $210 F C. $426 U D. $426 F

92. The spending variance for manufacturing overhead in April would be closest to: A. $1,600 U B. $1,648 F C. $1,600 F D. $1,648 U

93. 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: A. $6,144 F B. $6,740 U C. $6,740 F D. $6,144 U

10-39

Chapter 010, Flexible Budgets and Performance Analysis Moorhouse Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,690 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December:

94. The personnel expenses in the planning budget for December would be closest to: A. $51,009 B. $51,147 C. $53,370 D. $53,299

95. The medical supplies in the flexible budget for December would be closest to: A. $18,150 B. $17,472 C. $17,378 D. $18,105

10-40

Chapter 010, Flexible Budgets and Performance Analysis 96. The activity variance for personnel expenses in December would be closest to: A. $2,361 U B. $71 U C. $71 F D. $2,361 F

97. The revenue variance for December would be closest to: A. $3,680 U B. $3,429 F C. $3,429 U D. $3,680 F

98. The spending variance for medical supplies in December would be closest to: A. $680 F B. $680 U C. $725 U D. $725 F

10-41

Chapter 010, Flexible Budgets and Performance Analysis 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:

99. The administrative expenses in the planning budget for March would be closest to: A. $6,288 B. $6,300 C. $6,418 D. $6,483

100. The occupancy expenses in the flexible budget for March would be closest to: A. $13,400 B. $12,770 C. $13,349 D. $13,029

10-42

Chapter 010, Flexible Budgets and Performance Analysis 101. The activity variance for administrative expenses in March would be closest to: A. $118 U B. $12 F C. $118 F D. $12 U

102. The spending variance for medical supplies in March would be closest to: A. $1,050 U B. $1,050 F C. $1,263 F D. $1,263 U

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:

10-43

Chapter 010, Flexible Budgets and Performance Analysis 103. The net operating income in the planning budget for April would be closest to: A. $14,425 B. $19,519 C. $13,550 D. $20,115

104. The net operating income in the flexible budget for April would be closest to: A. $20,115 B. $19,519 C. $14,425 D. $13,550

105. The activity variance for net operating income in April would be closest to: A. $875 F B. $6,265 F C. $875 U D. $6,265 U

106. 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: A. $5,390 F B. $6,265 U C. $5,390 U D. $6,265 F

10-44

Chapter 010, Flexible Budgets and Performance Analysis Henkel Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 3,600 client-visits, but its actual level of activity was 3,550 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November:

107. The personnel expenses in the planning budget for November would be closest to: A. $74,120 B. $71,432 C. $70,440 D. $74,640

108. The occupancy expenses in the flexible budget for November would be closest to: A. $14,422 B. $14,831 C. $15,325 D. $15,400

10-45

Chapter 010, Flexible Budgets and Performance Analysis 109. The activity variance for administrative expenses in November would be closest to: A. $215 U B. $215 F C. $5 F D. $5 U

110. The spending variance for occupancy expenses in November would be closest to: A. $775 U B. $700 F C. $775 F D. $700 U

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:

10-46

Chapter 010, Flexible Budgets and Performance Analysis 111. The administrative expenses in the planning budget for January would be closest to: A. $5,047 B. $4,960 C. $5,106 D. $4,957

112. The medical supplies in the flexible budget for January would be closest to: A. $19,733 B. $18,932 C. $19,940 D. $19,377

113. The activity variance for personnel expenses in January would be closest to: A. $1,416 U B. $486 F C. $1,416 F D. $486 U

114. The spending variance for medical supplies in January would be closest to: A. $787 F B. $787 U C. $580 F D. $580 U

10-47

Chapter 010, Flexible Budgets and Performance Analysis 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 tenantdays, 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:

115. The wages and salaries in the planning budget for January would be closest to: A. $24,040 B. $23,755 C. $23,938 D. $24,198

116. The expendables in the flexible budget for January would be closest to: A. $35,946 B. $36,704 C. $35,680 D. $37,271

10-48

Chapter 010, Flexible Budgets and Performance Analysis 117. The activity variance for wages and salaries in January would be closest to: A. $158 F B. $158 U C. $102 U D. $102 F

118. The revenue variance for January would be closest to: A. $750 U B. $40 U C. $40 F D. $750 F

119. The spending variance for expendables in January would be closest to: A. $1,040 F B. $1,306 F C. $1,040 U D. $1,306 U

10-49

Chapter 010, Flexible Budgets and Performance Analysis 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 tenantdays, 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:

120. The administrative expenses in the planning budget for February would be closest to: A. $7,500 B. $7,252 C. $7,110 D. $7,512

121. The facility expenses in the flexible budget for February would be closest to: A. $13,700 B. $13,401 C. $13,788 D. $12,880

10-50

Chapter 010, Flexible Budgets and Performance Analysis 122. The activity variance for administrative expenses in February would be closest to: A. $248 U B. $248 F C. $12 U D. $12 F

123. The spending variance for expendables in February would be closest to: A. $836 F B. $1,360 F C. $836 U D. $1,360 U

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:

10-51

Chapter 010, Flexible Budgets and Performance Analysis 124. The net operating income in the planning budget for May would be closest to: A. $9,140 B. $11,626 C. $12,200 D. $8,420

125. The net operating income in the flexible budget for May would be closest to: A. $9,140 B. $8,420 C. $11,626 D. $12,200

126. The activity variance for net operating income in May would be closest to: A. $2,770 U B. $720 U C. $720 F D. $2,770 F

127. 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: A. $3,490 F B. $2,770 F C. $3,490 U D. $2,770 U

10-52

Chapter 010, Flexible Budgets and Performance Analysis Stent 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 3,000 tenant-days, but its actual level of activity was 2,950 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February:

128. The wages and salaries in the planning budget for February would be closest to: A. $22,670 B. $24,183 C. $23,780 D. $23,000


10-53

Chapter 010, Flexible Budgets and Performance Analysis 130. The activity variance for administrative expenses in February would be closest to: A. $150 U B. $20 U C. $20 F D. $150 F

131. The spending variance for facility expenses in February would be closest to: A. $130 U B. $130 F C. $5 U D. $5 F

Rippelmeyer 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 June, the kennel budgeted for 3,600 tenantdays, but its actual level of activity was 3,550 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for June:

10-54

Chapter 010, Flexible Budgets and Performance Analysis 132. The administrative expenses in the planning budget for June would be closest to: A. $7,996 B. $7,885 C. $7,555 D. $7,560

133. The expendables in the flexible budget for June would be closest to: A. $33,666 B. $34,270 C. $34,740 D. $34,621

134. The activity variance for wages and salaries in June would be closest to: A. $310 F B. $110 F C. $310 U D. $110 U

135. The spending variance for expendables in June would be closest to: A. $130 F B. $600 U C. $130 U D. $600 F

10-55

Chapter 010, Flexible Budgets and Performance Analysis Baugus 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 6,900 units, but its actual level of activity was 6,950 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for August:

136. The direct labor in the planning budget for August would be closest to: A. $27,760 B. $29,190 C. $27,560 D. $28,980

137. The direct materials in the flexible budget for August would be closest to: A. $127,650 B. $128,575 C. $127,581 D. $129,436

10-56

Chapter 010, Flexible Budgets and Performance Analysis 138. The activity variance for direct labor in August would be closest to: A. $1,220 F B. $210 U C. $210 F D. $1,220 U

139. The revenue variance for August would be closest to: A. $1,450 F B. $1,450 U C. $430 F D. $430 U

140. The spending variance for direct materials in August would be closest to: A. $70 F B. $855 U C. $70 U D. $855 F

10-57

Chapter 010, Flexible Budgets and Performance Analysis Lampert Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 6,100 units, but its actual level of activity was 6,060 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for March:

141. The selling and administrative expenses in the planning budget for March would be closest to: A. $26,560 B. $27,647 C. $27,466 D. $26,536

142. The manufacturing overhead in the flexible budget for March would be closest to: A. $48,822 B. $51,384 C. $51,440 D. $49,468

10-58

Chapter 010, Flexible Budgets and Performance Analysis 143. The activity variance for selling and administrative expenses in March would be closest to: A. $906 U B. $906 F C. $24 U D. $24 F

144. The spending variance for direct materials in March would be closest to: A. $900 F B. $900 U C. $1,376 U D. $1,376 F

Woofter 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 7,600 units, but its actual level of activity was 7,560 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for January:

10-59

Chapter 010, Flexible Budgets and Performance Analysis 145. The net operating income in the planning budget for January would be closest to: A. $16,410 B. $16,238 C. $28,604 D. $29,140

146. The net operating income in the flexible budget for January would be closest to: A. $28,604 B. $16,238 C. $16,410 D. $29,140

147. The activity variance for net operating income in January would be closest to: A. $12,816 F B. $12,816 U C. $536 F D. $536 U

148. 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 January would be closest to: A. $12,816 F B. $12,280 U C. $12,816 U D. $12,280 F

10-60

Chapter 010, Flexible Budgets and Performance Analysis Buffaloe 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 5,200 units, but its actual level of activity was 5,250 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for August:

149. The direct labor in the planning budget for August would be closest to: A. $40,040 B. $41,015 C. $40,425 D. $40,624

150. The manufacturing overhead in the flexible budget for August would be closest to: A. $53,919 B. $55,525 C. $52,896 D. $55,460

10-61

Chapter 010, Flexible Budgets and Performance Analysis 151. The activity variance for selling and administrative expenses in August would be closest to: A. $690 F B. $690 U C. $20 F D. $20 U

152. The spending variance for manufacturing overhead in August would be closest to: A. $2,055 F B. $2,055 U C. $2,120 U D. $2,120 F

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:

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Chapter 010, Flexible Budgets and Performance Analysis 153. The selling and administrative expenses in the planning budget for February would be closest to: A. $30,490 B. $30,495 C. $30,500 D. $30,190

154. The direct materials in the flexible budget for February would be closest to: A. $91,575 B. $95,985 C. $92,500 D. $94,075

155. The activity variance for direct labor in February would be closest to: A. $340 U B. $760 F C. $340 F D. $760 U

156. The spending variance for direct materials in February would be closest to: A. $3,450 F B. $2,525 U C. $3,450 U D. $2,525 F

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Chapter 010, Flexible Budgets and Performance Analysis Worden Hospital bases its budgets on patient-visits. The hospital's static budget for February appears below:

157. The total variable cost at the activity level of 4,400 patient-visits per month should be: A. $85,140 B. $87,120 C. $65,120 D. $63,640

158. The total fixed cost at the activity level of 4,700 patient-visits per month should be: A. $162,620 B. $148,780 C. $93,060 D. $85,140

159. The total cost at the activity level of 4,600 patient-visits per month should be: A. $153,720 B. $148,780 C. $153,220 D. $159,160

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Chapter 010, Flexible Budgets and Performance Analysis Dwelmont Hotel bases its budgets on guest-days. The hotel's static budget for May appears below:

160. The total variable cost at the activity level of 2,600 guest-days per month should be: A. $36,920 B. $32,660 C. $45,540 D. $51,480

161. The total fixed cost at the activity level of 2,900 guest-days per month should be: A. $78,200 B. $57,420 C. $98,600 D. $45,540

162. The total cost at the activity level of 2,800 guest-days per month should be: A. $95,200 B. $86,230 C. $85,300 D. $78,200

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Chapter 010, Flexible Budgets and Performance Analysis Springmeyer Clinic uses client-visits as its measure of activity. During August, the clinic budgeted for 2,900 client-visits, but its actual level of activity was 2,940 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for August:

163. The personnel expenses in the planning budget for August would be closest to: A. $69,600 B. $73,800 C. $70,560 D. $73,200

164. The administrative expenses in the planning budget for August would be closest to: A. $7,594 B. $7,590 C. $7,165 D. $7,264

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Chapter 010, Flexible Budgets and Performance Analysis 165. The net operating income in the planning budget for August would be closest to: A. $15,416 B. $11,878 C. $11,557 D. $14,560

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:

166. The personnel expenses in the planning budget for August would be closest to: A. $83,940 B. $88,444 C. $83,310 D. $87,310

167. The administrative expenses in the planning budget for August would be closest to: A. $7,780 B. $8,144 C. $8,040 D. $7,770

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Chapter 010, Flexible Budgets and Performance Analysis 168. The net operating income in the planning budget for August would be closest to: A. $15,615 B. $15,217 C. $18,705 D. $19,670

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:

169. The medical supplies in the flexible budget for May would be closest to: A. $14,907 B. $15,488 C. $15,207 D. $15,030

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Chapter 010, Flexible Budgets and Performance Analysis 170. The occupancy expenses in the flexible budget for May would be closest to: A. $14,334 B. $13,840 C. $13,786 D. $14,599


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:

172. The medical supplies in the flexible budget for April would be closest to: A. $21,340 B. $22,600 C. $22,325 D. $21,913

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Chapter 010, Flexible Budgets and Performance Analysis 173. The occupancy expenses in the flexible budget for April would be closest to: A. $15,575 B. $15,660 C. $14,975 D. $15,377


Lauser Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,690 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for July:

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Chapter 010, Flexible Budgets and Performance Analysis 175. The personnel expenses in the planning budget for July would be closest to: A. $54,730 B. $54,641 C. $52,341 D. $52,483

176. The occupancy expenses in the flexible budget for July would be closest to: A. $12,466 B. $12,991 C. $12,921 D. $12,480

177. The net operating income in the flexible budget for July would be closest to: A. $17,215 B. $17,122 C. $11,140 D. $11,018

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Chapter 010, Flexible Budgets and Performance Analysis Higgenbotham Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 3,600 client-visits, but its actual level of activity was 3,580 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for May:

178. The administrative expenses in the planning budget for May would be closest to: A. $5,261 B. $5,440 C. $5,232 D. $5,432

179. The net operating income in the planning budget for May would be closest to: A. $18,274 B. $13,920 C. $18,479 D. $13,616

180. The medical supplies in the flexible budget for May would be closest to: A. $20,164 B. $19,340 C. $19,941 D. $19,242

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Chapter 010, Flexible Budgets and Performance Analysis 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 tenantdays, 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:

181. The wages and salaries in the planning budget for September would be closest to: A. $13,741 B. $13,682 C. $13,781 D. $13,730

182. The administrative expenses in the planning budget for September would be closest to: A. $7,362 B. $7,181 C. $7,360 D. $7,212

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Chapter 010, Flexible Budgets and Performance Analysis 183. The net operating income in the planning budget for September would be closest to: A. $10,772 B. $6,979 C. $10,866 D. $6,870

Lutts 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 November, the kennel budgeted for 3,800 tenant-days, but its actual level of activity was 3,850 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:

184. The wages and salaries in the planning budget for November would be closest to: A. $27,610 B. $27,280 C. $28,238 D. $28,610

185. The administrative expenses in the planning budget for November would be closest to: A. $7,310 B. $7,520 C. $7,540 D. $7,215

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Chapter 010, Flexible Budgets and Performance Analysis 186. The net operating income in the planning budget for November would be closest to: A. $12,720 B. $9,648 C. $9,904 D. $13,115

Swader 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 March, the kennel budgeted for 2,900 tenant-days, but its actual level of activity was 2,930 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March:

187. The expendables in the flexible budget for March would be closest to: A. $25,905 B. $25,650 C. $27,274 D. $26,719

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Chapter 010, Flexible Budgets and Performance Analysis 188. The facility expenses in the flexible budget for March would be closest to: A. $20,700 B. $20,369 C. $20,793 D. $20,820

189. The net operating income in the flexible budget for March would be closest to: A. $12,522 B. $12,267 C. $9,414 D. $9,120

Whetstine 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 3,200 tenant-days, but its actual level of activity was 3,180 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:

190. The expendables in the flexible budget for September would be closest to: A. $27,630 B. $27,864 C. $27,517 D. $27,800

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Chapter 010, Flexible Budgets and Performance Analysis 191. The facility expenses in the flexible budget for September would be closest to: A. $21,320 B. $21,238 C. $21,513 D. $21,784

192. The net operating income in the flexible budget for September would be closest to: A. $8,548 B. $4,967 C. $5,029 D. $8,720

Kalinowski 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 2,300 tenant-days, but its actual level of activity was 2,320 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February:

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Chapter 010, Flexible Budgets and Performance Analysis 193. The wages and salaries in the planning budget for February would be closest to: A. $15,570 B. $16,197 C. $16,338 D. $15,688


195. The net operating income in the flexible budget for February would be closest to: A. $10,370 B. $10,608 C. $7,642 D. $7,775

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Chapter 010, Flexible Budgets and Performance Analysis Laboe 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 2,900 tenantdays, but its actual level of activity was 2,940 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:

196. The administrative expenses in the planning budget for February would be closest to: A. $7,814 B. $7,770 C. $7,922 D. $7,782

197. The net operating income in the planning budget for February would be closest to: A. $7,191 B. $7,391 C. $7,900 D. $8,260

198. The expendables in the flexible budget for February would be closest to: A. $26,990 B. $27,354 C. $27,021 D. $27,772

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Chapter 010, Flexible Budgets and Performance Analysis 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:

199. The direct labor in the planning budget for November would be closest to: A. $44,004 B. $42,744 C. $42,633 D. $43,890

200. The selling and administrative expenses in the planning budget for November would be closest to: A. $30,490 B. $29,974 C. $30,504 D. $29,896

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Chapter 010, Flexible Budgets and Performance Analysis 201. The net operating income in the planning budget for November would be closest to: A. $35,093 B. $29,340 C. $35,275 D. $29,604

Menson 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 5,800 units, but its actual level of activity was 5,830 units. The company has provided the following data concerning the formulas to be used in its budgeting:

202. The direct labor in the planning budget for December would be closest to: A. $46,057 B. $45,820 C. $43,927 D. $43,701

203. The selling and administrative expenses in the planning budget for December would be closest to: A. $24,898 B. $24,880 C. $23,988 D. $23,865

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Chapter 010, Flexible Budgets and Performance Analysis 204. The net operating income in the planning budget for December would be closest to: A. $19,788 B. $24,979 C. $19,380 D. $25,238

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:

205. The direct materials in the flexible budget for August would be closest to: A. $71,020 B. $71,338 C. $72,913 D. $72,264

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Chapter 010, Flexible Budgets and Performance Analysis 206. The manufacturing overhead in the flexible budget for August would be closest to: A. $55,358 B. $55,855 C. $55,076 D. $55,040

207. The net operating income in the flexible budget for August would be closest to: A. $22,506 B. $18,317 C. $17,930 D. $22,708

Poulsen Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During July, the company budgeted for 7,300 units, but its actual level of activity was 7,270 units. The company has provided the following data concerning the formulas to be used in its budgeting:

208. The direct materials in the flexible budget for July would be closest to: A. $68,338 B. $70,298 C. $68,620 D. $70,879

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Chapter 010, Flexible Budgets and Performance Analysis 209. The manufacturing overhead in the flexible budget for July would be closest to: A. $47,190 B. $47,151 C. $45,344 D. $45,719


Witherington Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 7,800 units, but its actual level of activity was 7,850 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June:

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Chapter 010, Flexible Budgets and Performance Analysis 211. The direct labor in the planning budget for June would be closest to: A. $32,970 B. $32,760 C. $34,310 D. $34,091

212. The manufacturing overhead in the flexible budget for June would be closest to: A. $57,435 B. $54,794 C. $57,380 D. $55,498

213. The net operating income in the flexible budget for June would be closest to: A. $34,017 B. $33,585 C. $29,520 D. $30,190

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Chapter 010, Flexible Budgets and Performance Analysis Manago Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 5,300 units, but its actual level of activity was 5,310 units. The company has provided the following data concerning the formulas to be used in its budgeting:|

214. The selling and administrative expenses in the planning budget for March would be closest to: A. $25,640 B. $26,199 C. $26,248 D. $25,648

215. The net operating income in the planning budget for March would be closest to: A. $11,705 B. $21,877 C. $21,710 D. $11,749

216. The direct materials in the flexible budget for March would be closest to: A. $73,278 B. $73,929 C. $73,140 D. $74,208

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Chapter 010, Flexible Budgets and Performance Analysis Bessey Hospital bases its budgets on patient-visits. The hospital's static planning budget for January appears below:

217. The spending variance for supplies costs in the flexible budget performance report for the month is: A. $4,180 F B. $4,180 U C. $2,560 F D. $2,560 U

218. The spending variance for laundry costs in the flexible budget performance report for the month is: A. $730 F B. $2,470 F C. $730 U D. $2,470 U

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Chapter 010, Flexible Budgets and Performance Analysis 219. The spending variance for occupancy costs in the flexible budget performance report for the month is: A. $330 F B. $2,090 F C. $330 U D. $2,090 U

Salling Corporation bases its budgets on machine-hours. The company's static planning budget for May appears below:

220. The spending variance for supplies costs in the flexible budget performance report for the month should be: A. $1,340 U B. $1,340 F C. $460 U D. $460 F

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Chapter 010, Flexible Budgets and Performance Analysis 221. The spending variance for power costs in the flexible budget performance report for the month should be: A. $310 U B. $310 F C. $820 U D. $820 F

222. The spending variance for equipment depreciation in the flexible budget performance report for the month should be: A. $540 F B. $10 F C. $10 U D. $540 U

Genito Corporation's static planning budget for October appears below. The company bases its budgets on machine-hours.

In October, the actual number of machine-hours was 8,800, the actual supplies cost was $69,450, the actual power cost was $34,190, the actual salaries cost was $86,490, and the actual equipment depreciation was $37,600.

223. The spending variance for supplies cost in the flexible budget performance report for the month should be: A. $4,500 F B. $7,110 F C. $7,110 U D. $4,500 U

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Chapter 010, Flexible Budgets and Performance Analysis 224. The spending variance for power cost in the flexible budget performance report for the month should be: A. $1,510 F B. $2,770 U C. $1,510 U D. $2,770 F

225. The spending variance for equipment depreciation in the flexible budget performance report for the month should be: A. $200 U B. $1,120 F C. $200 F D. $1,120 U

Lauter Printing uses two measures of activity, press runs and book set-ups, in the cost formulas in its budgets and performance reports. The cost formula for wages and salaries is $5,300 per month plus $480 per press run plus $1,080 per book set-up. The company expected its activity in October to be 169 press runs and 64 book set-ups, but the actual activity was 167 press runs and 60 book set-ups. The actual cost for wages and salaries in October was $155,690.

226. The wages and salaries in the planning budget for October would be closest to: A. $157,555 B. $155,690 C. $150,260 D. $155,540

227. The wages and salaries in the flexible budget for October would be closest to: A. $155,540 B. $155,690 C. $150,260 D. $153,699

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Chapter 010, Flexible Budgets and Performance Analysis 228. The activity variance for wages and salaries in October would be closest to: A. $5,280 U B. $150 U C. $150 F D. $5,280 F

229. The spending variance for wages and salaries in October would be closest to: A. $5,430 U B. $150 U C. $5,430 F D. $150 F

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.

230. The plane operating costs in the planning budget for June would be closest to: A. $239,580 B. $236,840 C. $234,085 D. $243,003

231. The plane operating costs in the flexible budget for June would be closest to: A. $233,504 B. $234,085 C. $239,580 D. $236,840

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Chapter 010, Flexible Budgets and Performance Analysis 232. The activity variance for plane operating costs in June would be closest to: A. $2,755 U B. $2,755 F C. $2,740 F D. $2,740 U

233. The spending variance for plane operating costs in June would be closest to: A. $2,740 U B. $5,495 U C. $5,495 F D. $2,740 F

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Chapter 010, Flexible Budgets and Performance Analysis Essay Questions 234. Immen Corporation bases its budgets on the activity measure customers served. During May, the company planned to serve 38,000 customers. The company has provided the following data concerning the formulas its uses in its budgeting:

The company has also furnished its income statement for May:

Required: Prepare a report showing the company's activity variances for May. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 235. Faggs Corporation bases its budgets on the activity measure customers served. During December, the company planned to serve 33,000 customers, but actually served 36,000 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 December. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 236. Brynteson Corporation bases its budgets on the activity measure customers served. During September, the company planned to serve 24,000 customers, but actually served 19,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $2.90q Wages and salaries: $24,700 + $0.90q Supplies: $0.40q Insurance: $4,900 Miscellaneous: $2,800 + $0.10q Required: Prepare a report showing the company's activity variances for September. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

237. Domin Corporation bases its budgets on the activity measure customers served. During April, the company planned to serve 31,000 customers, but actually served 35,000 customers. Revenue is $4.80 per customer served. Wages and salaries are $33,000 per month plus $1.60 per customer served. Supplies are $1.00 per customer served. Insurance is $12,200 per month. Miscellaneous expenses are $7,400 per month plus $0.20 per customer served. Required: Prepare a report showing the company's activity variances for April. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 238. 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.

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Chapter 010, Flexible Budgets and Performance Analysis 239. Mulvehill Clinic bases its budgets on the activity measure patient-visits. During June, the clinic planned for 3,000 patient-visits, but the actual level of activity was 3,400 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 June. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 240. 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).

241. Delamarter Clinic bases its budgets on the activity measure patient-visits. During June, the clinic planned for 2,600 patient-visits, but its actual level of activity was 3,100 patient-visits. Revenue should be $53.40 per patient-visit. Personnel expenses should be $39,700 per month plus $12.60 per patient-visit. Medical supplies should be $1,800 per month plus $10.40 per patient-visit. Occupancy expenses should be $8,200 per month plus $2.30 per patient-visit. Administrative expenses should be $6,100 per month plus $0.20 per patient-visit. Required: Prepare a report showing the clinic's activity variances for June. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 242. Alicuben Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for October was based on 2,200 meals, but the diner actually served 2,000 meals. The diner's director has provided the following cost formulas to use in budgets:

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 October. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 243. Aslanian Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for November was based on 2,200 meals, but the diner actually served 2,700 meals. The diner's director has provided the following cost formulas to use in budgets:

Required: Prepare a report showing the activity variances for each of the expenses and for total expenses for November. Label each variance as favorable (F) or unfavorable (U). Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 244. 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.

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Chapter 010, Flexible Budgets and Performance Analysis 245. Flicker Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for December was based on 2,400 meals, but the diner actually served 2,300 meals. The diner's director has provided the following cost data to use in the budget: groceries, $2.00 per meal; kitchen operations, $5,100 per month plus $1.85 per meal; administrative expenses, $2,900 per month plus $0.65 per meal; and fundraising expenses, $1,000 per month. Required: Prepare a report showing the activity variances for each of the expenses and for total expenses for December. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 246. Lakey Corporation uses customers served as its measure of activity. During July, the company budgeted for 33,000 customers, but actually served 34,000 customers. The company has provided the following data concerning the formulas used in its budgeting and its actual results for July:

Required: Prepare a report showing the company's revenue and spending variances for July. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 247. Mieras Corporation uses customers served as its measure of activity. During January, the company budgeted for 37,000 customers, but actually served 36,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $2.80q Wages and salaries: $22,800 + $0.90q Supplies: $0.50q Insurance: $7,500 Miscellaneous: $3,800 + $0.30q The company reported the following actual results for January:

Required: Prepare a report showing the company's revenue and spending variances for January. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 248. Fuquay Corporation uses customers served as its measure of activity. The company bases its budgets on the following information: Revenue should be $4.80 per customer served. Wages and salaries should be $26,500 per month plus $1.70 per customer served. Supplies should be $0.90 per customer served. Insurance should be $7,100 per month. Miscellaneous expenses should be $4,700 per month plus $0.20 per customer served. The company reported the following actual results for May:

Required: Prepare a report showing the company's revenue and spending variances for May. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 249. Kary Clinic uses patient-visits as its measure of activity. During May, the clinic budgeted for 3,800 patient-visits, but its actual level of activity was 4,100 patient-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for May:

Required: Prepare a report showing the clinic's revenue and spending variances for May. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 250. Gasco Clinic uses patient-visits as its measure of activity. During August, the clinic budgeted for 2,000 patient-visits, but its actual level of activity was 2,100 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits: Revenue: $62.90q Personnel expenses: $28,500 + $20.40q Medical supplies: $1,400 + $9.90q Occupancy expenses: $8,200 + $3.30q Administrative expenses: $4,000 + $0.40q 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).

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Chapter 010, Flexible Budgets and Performance Analysis 251. Braseth Clinic uses patient-visits as its measure of activity. The clinic bases its budgets on the following information: Revenue should be $39.90 per patient-visit. Personnel expenses should be $35,400 per month plus $13.00 per patient-visit. Medical supplies should be $1,100 per month plus $4.90 per patient-visit. Occupancy expenses should be $8,400 per month plus $2.00 per patient-visit. Administrative expenses should be $4,700 per month plus $0.20 per patient-visit. The clinic reported the following actual results for January:

Required: Prepare a report showing the clinic's revenue and spending variances for January. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 252. Villella Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for October was based on 3,800 meals. The diner's director has provided the following cost formulas to use in budgets:


Required: Prepare a report showing the spending variances for each of the expenses and for total expenses for October. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 253. Garing Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for March was based on 3,600 meals. The diner's director has provided the following cost data to use in the budget: groceries, $2.20 per meal; kitchen operations, $4,300 per month plus $1.90 per meal; administrative expenses, $3,300 per month plus $0.20 per meal; and fundraising expenses, $1,000 per month. The director has also provided the diner's statement of actual expenses for the month:

Required: Prepare a report showing the diner's spending variances for each of the expenses and for total expenses for March. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 254. Legorreta Corporation uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of November:

Required: Prepare the company's flexible budget performance report for November. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 255. Duell Clinic uses patient-visits as its measure of activity. The following report compares the planning budget to the actual operating results for the month of January:

Required: Prepare the clinic's flexible budget performance report for January. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 256. Squillace Corporation uses customers served as its measure of activity. During October, the company budgeted for 38,000 customers, but actually served 35,000 customers. The company has provided the following data concerning the formulas used in its budgeting and its actual results for October:

Required: Prepare the company's flexible budget performance report for October. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 257. Guy Corporation uses customers served as its measure of activity. During January, the company budgeted for 32,000 customers, but actually served 35,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $4.20q Wages and salaries: $33,900 + $1.40q Supplies: $0.60q Insurance: $10,000 Miscellaneous: $7,000 + $0.40q The company reported the following actual results for January:

Required: Prepare the company's flexible budget performance report for January. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 258. Cotillo Corporation uses customers served as its measure of activity. During December, the company budgeted for 29,000 customers, but actually served 27,000 customers. The company bases its budgets on the following information: Revenue should be $4.40 per customer served. Wages and salaries should be $33,300 per month plus $1.80 per customer served. Supplies should be $0.60 per customer served. Insurance should be $8,900 per month. Miscellaneous expenses should be $4,600 per month plus $0.10 per customer served. The company reported the following actual results for December:

Required: Prepare the company's flexible budget performance report for December. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 259. Thews Clinic uses patient-visits as its measure of activity. During August, the clinic budgeted for 2,000 patient-visits, but its actual level of activity was 2,200 patient-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for August:

Required: Prepare the clinic's flexible budget performance report for August. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 260. Mcgannon Clinic uses patient-visits as its measure of activity. During November, the clinic budgeted for 3,700 patient-visits, but its actual level of activity was 4,100 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits: Revenue: $23.90q Personnel expenses: $20,800 + $7.90q Medical supplies: $800 + $3.50q Occupancy expenses: $6,100 + $1.30q Administrative expenses: $3,100 + $0.10q The clinic reported the following actual results for November:

Required: Prepare the clinic's flexible budget performance report for November. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 261. Vernon Clinic uses patient-visits as its measure of activity. During February, the clinic budgeted for 3,100 patient-visits, but its actual level of activity was 2,800 patient-visits. The clinic bases its budgets on the following information: Revenue should be $30.20 per patientvisit. Personnel expenses should be $20,600 per month plus $9.70 per patient-visit. Medical supplies should be $1,400 per month plus $5.40 per patient-visit. Occupancy expenses should be $5,700 per month plus $1.50 per patient-visit. Administrative expenses should be $2,500 per month plus $0.30 per patient-visit. The clinic reported the following actual results for February:

Required: Prepare the clinic's flexible budget performance report for February. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 262. Gamon Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for April was based on 3,600 meals. The diner's director has provided the following cost formulas to use in budgets:


Required: Prepare a flexible budget performance report showing both the activity variances and the spending variances for each of the expenses and for total expenses for April. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 263. Wrape Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for April was based on 2,100 meals. The diner's director has provided the following cost data to use in the budget: groceries, $2.55 per meal; kitchen operations, $4,700 per month plus $1.70 per meal; administrative expenses, $3,300 per month plus $0.60 per meal; and fundraising expenses, $1,000 per month. The director has also provided the diner's statement of actual expenses for the month:


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Chapter 010, Flexible Budgets and Performance Analysis 264. 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.

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Chapter 010, Flexible Budgets and Performance Analysis 265. 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.

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Chapter 010, Flexible Budgets and Performance Analysis 266. 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.

267. During March, Holston Corporation plans to serve 31,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $4.60q Wages and salaries: $36,600 + $1.60q Supplies: $0.80q Insurance: $10,900 Miscellaneous: $8,500 + $0.20q Required: Prepare the company's planning budget for March.

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Chapter 010, Flexible Budgets and Performance Analysis 268. During August, Klinck Corporation plans to serve 33,000 customers. Revenue is $2.50 per customer served. Wages and salaries are $24,300 per month plus $0.90 per customer served. Supplies are $0.30 per customer served. Insurance is $7,100 per month. Miscellaneous expenses are $5,200 per month plus $0.10 per customer served. Required: Prepare the company's planning budget for August.

269. Novielli Corporation bases its budgets on the activity measure customers served. During November, the company planned to serve 39,000 customers, but actually served 44,000 customers. The company has provided the following data concerning the formulas it uses in its budgeting:

Required: Prepare the company's flexible budget for November based on the actual level of activity for the month.

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Chapter 010, Flexible Budgets and Performance Analysis 270. During September, Booker Corporation budgeted for 20,000 customers, but actually served 22,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $5.50q Wages and salaries: $28,300 + $1.70q Supplies: $1.00q Insurance: $6,300 Miscellaneous: $5,400 + $0.40q Required: Prepare the company's flexible budget for September based on the actual level of activity for the month.

271. During July, Bosell Corporation budgeted for 22,000 customers, but actually served 21,000 customers. Revenue should be $6.80 per customer served. Wages and salaries should be $35,900 per month plus $2.40 per customer served. Supplies should be $1.20 per customer served. Insurance should be $12,000 per month. Miscellaneous expenses should be $6,000 per month plus $0.30 per customer served. Required: Prepare the company's flexible budget for July based on the actual level of activity for the month.

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Chapter 010, Flexible Budgets and Performance Analysis 272. Gramling Clinic bases its budgets on patient-visits. During July, the clinic plans for a level of activity of 2,500 patient-visits. The clinic has provided the following data concerning the formulas it uses in its budgeting:

Required: Prepare the clinic's planning budget for July.

273. During September, Noaks Clinic plans for an activity level of 3,300 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits: Revenue: $30.50q Personnel expenses: $30,900 + $8.40q Medical supplies: $1,200 + $4.50q Occupancy expenses: $6,400 + $1.70q Administrative expenses: $3,700 + $0.10q Required: Prepare the clinic's planning budget for September.

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Chapter 010, Flexible Budgets and Performance Analysis 274. 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 patientvisit. 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.

275. Clune Clinic bases its budgets on the activity measure patient-visits. During October, the clinic planned for an activity level of 2,100 patient-visits, but the activity level was actually 2,600 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 October based on the actual level of activity for the month.

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Chapter 010, Flexible Budgets and Performance Analysis 276. During October, Moceri Clinic budgeted for 3,000 patient-visits, but its actual level of activity was 3,500 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits: Revenue: $41.80q Personnel expenses: $30,900 + $13.70q Medical supplies: $700 + $7.80q Occupancy expenses: $8,900 + $1.50q Administrative expenses: $3,600 + $0.20q Required: Prepare the clinic's flexible budget for October based on the actual level of activity for the month.

277. During May, Phong Clinic budgeted for 2,900 patient-visits, but its actual level of activity was 3,100 patient-visits. Revenue should be $31.30 per patient-visit. Personnel expenses should be $23,700 per month plus $8.10 per patient-visit. Medical supplies should be $700 per month plus $6.20 per patient-visit. Occupancy expenses should be $7,000 per month plus $1.50 per patient-visit. Administrative expenses should be $3,400 per month plus $0.40 per patient-visit. Required: Prepare the clinic's flexible budget for May based on the actual level of activity for the month.

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Chapter 010, Flexible Budgets and Performance Analysis 278. Vilanova Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for May is to be based on 2,700 meals. The diner's director has provided the following cost formulas to use in the budget:

Required: Prepare the diner's budget for the month of May. The budget will only contain the costs listed above; no revenues will be on the budget.

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Chapter 010, Flexible Budgets and Performance Analysis 279. Mcduffey Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for September was based on 2,900 meals, but the diner actually served 2,800 meals. The diner's director has provided the following cost formulas to use in budgets:

Required: Prepare the diner's flexible budget for the actual number of meals served in September. The budget will only contain the costs listed above; no revenues will be on the budget.

280. Korando Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for June is to be based on 2,900 meals. The diner's director has provided the following cost data to use in the budget: groceries, $2.60 per meal; kitchen operations, $4,200 per month plus $1.15 per meal; administrative expenses, $2,800 per month plus $0.65 per meal; and fundraising expenses, $1,000 per month. Required: Prepare the diner's budget for the month of June. The budget will only contain the costs listed above; no revenues will be on the budget.

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Chapter 010, Flexible Budgets and Performance Analysis 281. Salvia Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for May was based on 3,400 meals, but the diner actually served 3,700 meals. The diner's director has provided the following cost data to use in the budget: groceries, $2.90 per meal; kitchen operations, $4,100 per month plus $1.90 per meal; administrative expenses, $2,400 per month plus $0.20 per meal; and fundraising expenses, $1,000 per month. Required: Prepare the diner's flexible budget for the actual number of meals served in May. The budget will only contain the costs listed above; no revenues will be on the budget.

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Chapter 010, Flexible Budgets and Performance Analysis 282. Alarie 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 November, the school budgeted for 1,420 students and 139 courses. The actual activity for the month was 1,220 students and 142 courses. Required: Prepare a report showing the school's activity variances for November. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 283. Eisner 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 October, the school budgeted for 1,490 students and 85 courses. The school's income statement showing the actual results for the month appears below:

Required: Prepare a report showing the school's activity variances for October. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 284. Bures 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 360 guests and 134 jeeps. The actual activity for the month was 335 guests and 136 jeeps. Required: Prepare a report showing the company's activity variances for April. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 285. 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).

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Chapter 010, Flexible Budgets and Performance Analysis 286. Ahrns 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 July, the school budgeted for 1,770 students and 148 courses. The school's income statement showing the actual results for the month appears below:

Required: Prepare a report showing the school's revenue and spending variances for July. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 287. 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).

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Chapter 010, Flexible Budgets and Performance Analysis 288. Brink 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 1,710 students and 110 courses. The school's income statement showing the actual results for the month appears below:

Required: Prepare a flexible budget performance report showing both the school's activity variances and revenue and spending variances for June. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 289. Palamino 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 January, the company budgeted for 330 guests and 143 jeeps. The company's income statement showing the actual results for the month appears below:

Required: Prepare a flexible budget performance report showing both the company's activity variances and revenue and spending variances for January. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 290. Alto Clinic uses patient-visits as its measure of activity. The clinic has provided the following report:

Required: Prepare the clinic's flexible budget performance report for June. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis 291. Drobot 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 November, the school budgeted for 1,470 students and 126 courses. The actual activity for the month was 1,770 students and 122 courses. Required: Prepare the school's planning budget for November.

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Chapter 010, Flexible Budgets and Performance Analysis 292. Hasselman 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 January, the school budgeted for 1,110 students and 105 courses. The actual activity for the month was 1,210 students and 103 courses. Required: Prepare the school's flexible budget for the actual level of activity in January.

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Chapter 010, Flexible Budgets and Performance Analysis 293. Lantrip 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 January, the company budgeted for 356 guests and 174 jeeps. The actual activity for the month was 341 guests and 177 jeeps. Required: Prepare the company's planning budget for January.

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Chapter 010, Flexible Budgets and Performance Analysis 294. Karpin 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 July, the company budgeted for 434 guests and 132 jeeps. The actual activity for the month was 459 guests and 137 jeeps. Required: Prepare the company's flexible budget for the actual level of activity in July.

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Chapter 010, Flexible Budgets and Performance Analysis Key

True / False Questions 1. The main difference between a flexible budget and a static budget is that a flexible budget does not contain fixed costs. FALSE

AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 1 Level: Easy

2. A problem with directly comparing a static planning budget to actual costs is that this comparison fails to distinguish between differences in costs that are due to changes in activity and differences that are due to how well costs were controlled. TRUE


3. A planning budget is prepared before the period begins and is valid for only the planned level of activity. TRUE


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4. A flexible budget is an estimate of what revenues and costs should have been, given the level of activity that had been planned for the period. FALSE

AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 1 Level: Medium

5. An unfavorable activity variance for a cost indicates that spending was higher than it should have been for the actual level of activity for the period. FALSE


6. The activity variance for revenue is unfavorable if the actual revenue for the period is less than the revenue in the static planning budget. FALSE


7. The revenue and spending variances are the differences between the static planning budget and the flexible budget. FALSE


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8. A revenue variance is unfavorable if the actual revenue is less than what the revenue should have been for the actual level of activity for the period. TRUE


9. When the activity measure is the number of units sold, the revenue variance is unfavorable if the average actual selling price is less than expected. TRUE


10. A favorable spending variance occurs when the actual cost is less than the amount of that cost in the flexible budget. TRUE


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


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12. It may be easier to control fixed costs than variable costs. TRUE


13. A static planning budget is suitable for planning and for evaluating how well costs are controlled. FALSE


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


15. If the actual level of activity is 4% more than planned, then the fixed costs in the static budget should be increased by 4% before comparing them to actual costs. FALSE


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Multiple Choice Questions 16. A flexible budget: A. classifies budget requests by activity and estimates the benefits arising from each activity. B. presents a statement of expectations for a period of time but does not present a firm commitment. C. presents the plan for only one level of activity and does not adjust to changes in the level of activity. D. presents the plan for a range of activity so that the plan can be adjusted for changes in activity levels.

AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 1 Level: Easy Source: CMA, adapted

17. A flexible budget is a budget that: A. is updated with actual costs as they occur during the period. B. is updated to reflect the actual level of activity during the period. C. is prepared using a computer spreadsheet application. D. contains only variable production costs.

AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 1 Level: Easy Source: CIMA, adapted

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18. Which of the following comparisons best isolates the impact that changes in prices of inputs and outputs have on performance? A. static planning budget and flexible budget B. static planning budget and actual results C. flexible budget and actual results D. master budget and static planning budget


19. Marchi Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below:

The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 70 guests? A. $42,460.00 B. $6,620.00 C. $7,086.15 D. $6,580.00 Variable cost per guest = ($156 + $364) 65 guests = $8 per guest ($250 + $4,480 + $1,330) + ($8 x 70) = $6,620.00

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 1 Level: Easy

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20. 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? A. $110,710.00 B. $109,620.00 C. $110,868.00 D. $111,025.38 Variable cost per machine-hour = ($34,320 + $50,700) 7,800 machine-hours = $10.90 per machine-hour ($10,200 + $5,600 + $8,800) + ($10.90 x 7,900) = $110,710.00


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21. Placek Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below:

The total overhead cost at an activity level of 7,700 patient-visits per month should be: A. $129,550 B. $121,720 C. $129,100 D. $137,830 ($21,080 + $44,880) + [($2.60 + $5.60) x 7,700] = $129,100


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22. Dike Hotel bases its budgets on guest-days. The hotel's static budget for June appears below:

The total overhead cost at an activity level of 8,400 guest-days per month should be: A. $159,440 B. $149,650 C. $160,430 D. $172,200 ($68,620 + $16,060) + [($6.70 + $2.20) x 8,400] = $159,440


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23. Blackwelder Snow Removal's cost formula for its vehicle operating cost is $1,240 per month plus $348 per snow-day. For the month of December, the company planned for activity of 12 snow-days, but the actual level of activity was 14 snow-days. The actual vehicle operating cost for the month was $6,330. The vehicle operating cost in the planning budget for December would be closest to: A. $5,426 B. $6,112 C. $5,416 D. $6,330 $1,240 + $348 x 12 = $5,416


24. Ofarrell Snow Removal's cost formula for its vehicle operating cost is $1,840 per month plus $377 per snow-day. For the month of November, the company planned for activity of 14 snow-days, but the actual level of activity was 19 snow-days. The actual vehicle operating cost for the month was $9,280. The vehicle operating cost in the flexible budget for November would be closest to: A. $9,003 B. $7,118 C. $9,280 D. $9,660 $1,840 + $377 x 19 = $9,003


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25. Guilbault Midwifery's cost formula for its wages and salaries is $2,340 per month plus $154 per birth. For the month of June, the company planned for activity of 115 births, but the actual level of activity was 112 births. The actual wages and salaries for the month was $19,530. The wages and salaries in the planning budget for June would be closest to: A. $19,530 B. $19,588 C. $20,053 D. $20,050 $2,340 + $154 x 115 = $20,050


26. Dewberry Midwifery's cost formula for its wages and salaries is $1,960 per month plus $429 per birth. For the month of December, the company planned for activity of 128 births, but the actual level of activity was 130 births. The actual wages and salaries for the month was $56,020. The wages and salaries in the flexible budget for December would be closest to: A. $57,761 B. $57,730 C. $56,020 D. $56,872 $1,960 + $429 x 130 = $57,730


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27. 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: A. $10,580 B. $10,282 C. $10,686 D. $10,202 $2,250 + $16 x 502 = $10,282


28. Rising Framing's cost formula for its supplies cost is $2,210 per month plus $10 per frame. For the month of January, the company planned for activity of 710 frames, but the actual level of activity was 705 frames. The actual supplies cost for the month was $9,500. The supplies cost in the flexible budget for January would be closest to: A. $9,260 B. $9,244 C. $9,500 D. $9,310 $2,210 + $10 x 705 = $9,260


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29. Naval 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 $430 per month plus $99 per job plus $10 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 12 jobs and 126 meals, but the actual activity was 9 jobs and 124 meals. The actual cost for catering supplies in March was $2,550. The catering supplies in the planning budget for March would be closest to: A. $3,400 B. $2,561 C. $2,550 D. $2,878 $430 + $99 x 12 + $10 x 126 = $2,878


30. Johannsen 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 $310 per month plus $103 per job plus $23 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 February to be 28 jobs and 187 meals, but the actual activity was 26 jobs and 192 meals. The actual cost for catering supplies in February was $7,620. The catering supplies in the flexible budget for February would be closest to: A. $7,495 B. $7,404 C. $7,620 D. $6,960 $310 + $103 x 26 + $23 x 192 = $7,404


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31. Venanzi 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 $40,720 per month plus $2,646 per flight plus $11 per passenger. The company expected its activity in September to be 62 flights and 288 passengers, but the actual activity was 64 flights and 289 passengers. The actual cost for plane operating costs in September was $214,430. The activity variance for plane operating costs in September would be closest to: A. $6,490 U B. $5,303 F C. $6,490 F D. $5,303 U

Since the flexible budget is greater than the planning budget, the variance is unfavorable (U)

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 2 Learning Objective: 5 Level: Easy

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32. Kimbril 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 $530 per month plus $91 per job plus $12 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 January to be 27 jobs and 174 meals, but the actual activity was 31 jobs and 173 meals. The actual cost for catering supplies in January was $5,330. The activity variance for catering supplies in January would be closest to: A. $255 F B. $255 U C. $352 F D. $352 U



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33. Portsche Snow Removal's cost formula for its vehicle operating cost is $2,310 per month plus $317 per snow-day. For the month of November, the company planned for activity of 18 snow-days, but the actual level of activity was 20 snow-days. The actual vehicle operating cost for the month was $8,730. The activity variance for vehicle operating cost in November would be closest to: A. $714 U B. $714 F C. $634 F D. $634 U



34. Reuer Midwifery's cost formula for its wages and salaries is $2,900 per month plus $475 per birth. For the month of March, the company planned for activity of 116 births, but the actual level of activity was 117 births. The actual wages and salaries for the month was $56,270. The activity variance for wages and salaries in March would be closest to: A. $1,730 U B. $475 F C. $475 U D. $1,730 F



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35. Embertson Framing's cost formula for its supplies cost is $1,350 per month plus $16 per frame. For the month of June, the company planned for activity of 816 frames, but the actual level of activity was 812 frames. The actual supplies cost for the month was $14,680. The activity variance for supplies cost in June would be closest to: A. $64 U B. $274 U C. $64 F D. $274 F

Since the flexible budget expense is less than the planning budget, the variance is favorable (F)


36. Lapinsky 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 $31,400 per month plus $2,148 per flight plus $7 per passenger. The company expected its activity in April to be 89 flights and 261 passengers, but the actual activity was 84 flights and 260 passengers. The actual cost for plane operating costs in April was $204,810. The spending variance for plane operating costs in April would be closest to: A. $8,842 U B. $19,589 F C. $19,589 U D. $8,842 F

Since the actual expense is less than the flexible budget, the variance is favorable (F)


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37. 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. $380 F B. $132 U C. $132 F D. $380 U



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38. Dunklin Medical Clinic measures its activity in terms of patient-visits. Last month, the budgeted level of activity was 1,620 patient-visits and the actual level of activity was 1,540 patient-visits. The cost formula for administrative expenses is $3.20 per patient-visit plus $14,300 per month. The actual administrative expense was $21,050. In the clinic's flexible budget performance report for last month, the spending variance for administrative expenses was: A. $118 F B. $256 F C. $1,566 U D. $1,822 U

Since the actual expense is more than the flexible budget, the variance is unfavorable (U)

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 3 Level: Medium

39. Brattain 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 1,140 square feet. The company's owner budgets for supply costs, a variable cost, at $2.10 per square foot. The actual supply cost last month was $3,260. In the company's flexible budget performance report for last month, what would have been the spending variance for supply costs? A. $257 F B. $866 U C. $677 U D. $189 F



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40. Cahalane Natural Dying Corporation measures its activity in terms of skeins of yarn dyed. Last month, the budgeted level of activity was 11,600 skeins and the actual level of activity was 12,000 skeins. The company's owner budgets for dye costs, a variable cost, at $0.31 per skein. The actual dye cost last month was $3,540. In the company's flexible budget performance report for last month, what would have been the spending variance for dye costs? A. $118 U B. $124 U C. $56 F D. $180 F



41. 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: A. $3.32 B. $3.81 C. $2.83 D. $3.85 Actual supplies - Flexible budget = Spending variable (U) Actual supplies - (19,500 x $2.83) = $9,555 Actual supplies = $64,740 Actual cost per unit = $64,740 19,500 = $3.32

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 3 Level: Hard

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42. Velten Corporation's flexible budget performance report for last month shows that actual indirect materials cost, a variable cost, was $45,198 and that the spending variance for indirect materials cost was $9,114 favorable. During that month, the company worked 18,600 machinehours. Budgeted activity for the month had been 19,000 machine-hours. The cost formula per machine-hour for indirect materials cost must have been closest to: A. $1.90 B. $2.86 C. $1.94 D. $2.92 Flexible budget - Actual cost = Spending variance (F) Flexible budget - $45,198 = $9,114 Flexible budget = $54,312 Cost formula per machine hour = $54,312 18,600 = $2.92

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 3 Level: Hard

43. Lesinski Snow Removal's cost formula for its vehicle operating cost is $1,770 per month plus $483 per snow-day. For the month of February, the company planned for activity of 19 snow-days, but the actual level of activity was 24 snow-days. The actual vehicle operating cost for the month was $13,070. The spending variance for vehicle operating cost in February would be closest to: A. $2,123 U B. $292 F C. $2,123 F D. $292 U



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44. Harville Midwifery's cost formula for its wages and salaries is $1,610 per month plus $199 per birth. For the month of March, the company planned for activity of 118 births, but the actual level of activity was 122 births. The actual wages and salaries for the month was $25,430. The spending variance for wages and salaries in March would be closest to: A. $458 F B. $338 U C. $458 U D. $338 F



45. Olivier Framing's cost formula for its supplies cost is $2,870 per month plus $16 per frame. For the month of January, the company planned for activity of 533 frames, but the actual level of activity was 534 frames. The actual supplies cost for the month was $11,080. The spending variance for supplies cost in January would be closest to: A. $334 U B. $334 F C. $318 U D. $318 F



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46. Elizarraras 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 $39,820 per month plus $2,938 per flight plus $8 per passenger. The company expected its activity in June to be 64 flights and 229 passengers, but the actual activity was 66 flights and 225 passengers. The actual cost for plane operating costs in June was $234,570. The plane operating costs in the planning budget for June would be closest to: A. $229,684 B. $227,462 C. $234,570 D. $235,528 $39,820 + $2,938 x 64 + $8 x 229 = $229,684


47. 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: A. $220,790 B. $223,030 C. $223,657 D. $216,740 $41,380 + $2,282 x 78 + $14 x 261 = $223,030


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Pollica Corporation's cost formula for its selling and administrative expense is $11,400 per month plus $94 per unit. For the month of March, the company planned for activity of 5,700 units, but the actual level of activity was 5,660 units. The actual selling and administrative expense for the month was $522,860.

48. The selling and administrative expense in the planning budget for March would be closest to: A. $522,860 B. $547,200 C. $543,440 D. $526,555 $11,400 + $94 x 5,700 = $547,200


49. The selling and administrative expense in the flexible budget for March would be closest to: A. $547,200 B. $522,860 C. $543,360 D. $543,440 $11,400 + $94 x 5,660 = $543,440


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50. The activity variance for selling and administrative expense in March would be closest to: A. $24,340 F B. $24,340 U C. $3,760 U D. $3,760 F



51. The spending variance for selling and administrative expense in March would be closest to: A. $20,580 F B. $24,340 U C. $24,340 F D. $20,580 U



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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.

52. The manufacturing overhead in the planning budget for March would be closest to: A. $373,630 B. $371,650 C. $376,668 D. $374,300 $45,700 + $53 x 6,200 = $374,300


53. The manufacturing overhead in the flexible budget for March would be closest to: A. $371,650 B. $371,281 C. $373,630 D. $374,300 $45,700 + $53 x 6,150 = $371,650


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54. The activity variance for manufacturing overhead in March would be closest to: A. $670 U B. $670 F C. $2,650 F D. $2,650 U



55. The spending variance for manufacturing overhead in March would be closest to: A. $670 F B. $1,980 U C. $1,980 F D. $670 U

Since the actual expense is greater than the flexible budget, the variance is unfavorable (U)


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Kaaihue Detailing's cost formula for its materials and supplies is $2,750 per month plus $17 per vehicle. For the month of April, the company planned for activity of 95 vehicles, but the actual level of activity was 135 vehicles. The actual materials and supplies for the month was $4,850.

56. The materials and supplies in the planning budget for April would be closest to: A. $4,850 B. $5,045 C. $3,413 D. $4,365 $2,750 + $17 x 95 = $4,365


57. The materials and supplies in the flexible budget for April would be closest to: A. $6,203 B. $4,850 C. $4,365 D. $5,045 $2,750 + $17 x 135 = $5,045


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58. The activity variance for materials and supplies in April would be closest to: A. $680 U B. $485 F C. $680 F D. $485 U



59. The spending variance for materials and supplies in April would be closest to: A. $195 F B. $485 F C. $195 U D. $485 U



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Deleston Boat Wash's cost formula for its cleaning equipment and supplies is $2,150 per month plus $21 per boat. For the month of September, the company planned for activity of 79 boats, but the actual level of activity was 39 boats. The actual cleaning equipment and supplies for the month was $3,110.

60. The cleaning equipment and supplies in the planning budget for September would be closest to: A. $3,110 B. $6,300 C. $2,969 D. $3,809 $2,150 + $21 x 79 = $3,809


61. The cleaning equipment and supplies in the flexible budget for September would be closest to: A. $1,880 B. $3,110 C. $3,809 D. $2,969 $2,150 + $21 x 39 = $2,969


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62. The activity variance for cleaning equipment and supplies in September would be closest to: A. $840 F B. $699 F C. $699 U D. $840 U



63. The spending variance for cleaning equipment and supplies in September would be closest to: A. $699 F B. $699 U C. $141 F D. $141 U



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Werber Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 2,700 client-visits, but its actual level of activity was 2,730 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January:

64. The activity variance for personnel expenses in January would be closest to: A. $661 U B. $261 U C. $261 F D. $661 F


AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 1 Learning Objective: 2 Level: Medium

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65. The activity variance for administrative expenses in January would be closest to: A. $12 F B. $8 F C. $12 U D. $8 U



66. The activity variance for net operating income in January would be closest to: A. $2,019 U B. $2,019 F C. $489 F D. $489 U

Since the flexible budget net operating income is greater than the planning budget, the variance is favorable (F)


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Feiner Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,220 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting:

67. The activity variance for personnel expenses in December would be closest to: A. $4,024 F B. $466 F C. $466 U D. $4,024 U



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68. The activity variance for administrative expenses in December would be closest to: A. $8 F B. $162 F C. $162 U D. $8 U



69. The activity variance for net operating income in December would be closest to: A. $690 U B. $9,670 U C. $690 F D. $9,670 F



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Grundhoefer 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 April, the kennel budgeted for 2,000 tenantdays, but its actual level of activity was 1,990 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for April:

70. The activity variance for wages and salaries in April would be closest to: A. $66 F B. $564 U C. $564 F D. $66 U



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71. The activity variance for administrative expenses in April would be closest to: A. $1 F B. $79 F C. $79 U D. $1 U



72. The activity variance for net operating income in April would be closest to: A. $141 U B. $2,651 U C. $2,651 F D. $141 F

Since the flexible budget net operating income is less than the planning budget, the variance is unfavorable (U)


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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 tenantdays, 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:

73. The activity variance for wages and salaries in February would be closest to: A. $1,152 U B. $1,152 F C. $292 U D. $292 F



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75. The activity variance for net operating income in February would be closest to: A. $368 F B. $368 U C. $632 F D. $632 U



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Enriques 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 4,990 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for February:

76. The activity variance for direct labor in February would be closest to: A. $61 U B. $1,081 U C. $61 F D. $1,081 F



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77. The activity variance for selling and administrative expenses in February would be closest to: A. $1,308 F B. $1,308 U C. $2 U D. $2 F



78. The activity variance for net operating income in February would be closest to: A. $2,716 F B. $2,716 U C. $176 U D. $176 F



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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:

79. The activity variance for direct labor in December would be closest to: A. $180 U B. $70 F C. $70 U D. $180 F



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80. The activity variance for selling and administrative expenses in December would be closest to: A. $14 U B. $14 F C. $1,206 F D. $1,206 U



81. The activity variance for net operating income in December would be closest to: A. $2,372 U B. $328 F C. $2,372 F D. $328 U



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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:

82. The revenue variance for July would be closest to: A. $2,581 F B. $2,110 U C. $2,110 F D. $2,581 U

Since the actual revenue is greater than the flexible budget, the variance is favorable (F)


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83. The spending variance for medical supplies in July would be closest to: A. $580 U B. $645 U C. $645 F D. $580 F



84. The spending variance for occupancy expenses in July would be closest to: A. $265 F B. $280 U C. $280 F D. $265 U



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85. 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 July would be closest to: A. $4,508 F B. $4,290 U C. $4,290 F D. $4,508 U

Since the actual net operating income is greater than the flexible budget, the variance is favorable (F)


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Razor 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 November, the kennel budgeted for 3,000 tenantdays, but its actual level of activity was 3,010 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for November:

86. The revenue variance for November would be closest to: A. $1,607 U B. $1,910 U C. $1,607 F D. $1,910 F

Since the actual revenue is less than the flexible budget, the variance is unfavorable (U)


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87. The spending variance for expendables in November would be closest to: A. $240 F B. $354 F C. $240 U D. $354 U



88. The spending variance for facility expenses in November would be closest to: A. $416 U B. $416 F C. $390 F D. $390 U



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89. 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 November would be closest to: A. $3,520 F B. $3,428 U C. $3,520 U D. $3,428 F

Since the actual net operating income is less than the flexible budget, the variance is unfavorable (U)


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Vandall 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 7,300 units, but its actual level of activity was 7,340 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for April:

90. The revenue variance for April would be closest to: A. $4,274 F B. $5,690 F C. $5,690 U D. $4,274 U



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91. The spending variance for direct materials in April would be closest to: A. $210 U B. $210 F C. $426 U D. $426 F



92. The spending variance for manufacturing overhead in April would be closest to: A. $1,600 U B. $1,648 F C. $1,600 F D. $1,648 U



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93. 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: A. $6,144 F B. $6,740 U C. $6,740 F D. $6,144 U



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Moorhouse Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,690 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December:

94. The personnel expenses in the planning budget for December would be closest to: A. $51,009 B. $51,147 C. $53,370 D. $53,299 $27,100 + $7.10 x 3,700 = $53,370


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95. The medical supplies in the flexible budget for December would be closest to: A. $18,150 B. $17,472 C. $17,378 D. $18,105 $1,500 + $4.50 x 3,690 = $18,105


96. The activity variance for personnel expenses in December would be closest to: A. $2,361 U B. $71 U C. $71 F D. $2,361 F



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97. The revenue variance for December would be closest to: A. $3,680 U B. $3,429 F C. $3,429 U D. $3,680 F

Since the actual revenue is greater than the flexible budget, the variance is favorable (F)


98. The spending variance for medical supplies in December would be closest to: A. $680 F B. $680 U C. $725 U D. $725 F



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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:

99. The administrative expenses in the planning budget for March would be closest to: A. $6,288 B. $6,300 C. $6,418 D. $6,483 $5,100 + $0.40 x 3,000 = $6,300


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100. The occupancy expenses in the flexible budget for March would be closest to: A. $13,400 B. $12,770 C. $13,349 D. $13,029 $8,300 + $1.70 x 2,970 = $13,349


101. The activity variance for administrative expenses in March would be closest to: A. $118 U B. $12 F C. $118 F D. $12 U



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102. The spending variance for medical supplies in March would be closest to: A. $1,050 U B. $1,050 F C. $1,263 F D. $1,263 U



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:

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Chapter 010, Flexible Budgets and Performance Analysis Key 103. The net operating income in the planning budget for April would be closest to: A. $14,425 B. $19,519 C. $13,550 D. $20,115




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105. The activity variance for net operating income in April would be closest to: A. $875 F B. $6,265 F C. $875 U D. $6,265 U



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106. 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: A. $5,390 F B. $6,265 U C. $5,390 U D. $6,265 F



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Henkel Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 3,600 client-visits, but its actual level of activity was 3,550 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November:

107. The personnel expenses in the planning budget for November would be closest to: A. $74,120 B. $71,432 C. $70,440 D. $74,640 $37,200 + $10.40 x 3,600 = $74,640


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108. The occupancy expenses in the flexible budget for November would be closest to: A. $14,422 B. $14,831 C. $15,325 D. $15,400 $10,000 + $1.50 x 3,550 = $15,325


109. The activity variance for administrative expenses in November would be closest to: A. $215 U B. $215 F C. $5 F D. $5 U



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110. The spending variance for occupancy expenses in November would be closest to: A. $775 U B. $700 F C. $775 F D. $700 U



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:

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Chapter 010, Flexible Budgets and Performance Analysis Key 111. The administrative expenses in the planning budget for January would be closest to: A. $5,047 B. $4,960 C. $5,106 D. $4,957 $4,700 + $0.10 x 2,600 = $4,960


112. The medical supplies in the flexible budget for January would be closest to: A. $19,733 B. $18,932 C. $19,940 D. $19,377 $2,000 + $6.90 x 2,570 = $19,733


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113. The activity variance for personnel expenses in January would be closest to: A. $1,416 U B. $486 F C. $1,416 F D. $486 U



114. The spending variance for medical supplies in January would be closest to: A. $787 F B. $787 U C. $580 F D. $580 U



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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 tenantdays, 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:

115. The wages and salaries in the planning budget for January would be closest to: A. $24,040 B. $23,755 C. $23,938 D. $24,198 $3,500 + $7.90 x 2,600 = $24,040


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116. The expendables in the flexible budget for January would be closest to: A. $35,946 B. $36,704 C. $35,680 D. $37,271 $1,100 + $13.30 x 2,620 = $35,946


117. The activity variance for wages and salaries in January would be closest to: A. $158 F B. $158 U C. $102 U D. $102 F



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118. The revenue variance for January would be closest to: A. $750 U B. $40 U C. $40 F D. $750 F



119. The spending variance for expendables in January would be closest to: A. $1,040 F B. $1,306 F C. $1,040 U D. $1,306 U



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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 tenantdays, 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:

120. The administrative expenses in the planning budget for February would be closest to: A. $7,500 B. $7,252 C. $7,110 D. $7,512 $6,900 + $0.30 x 2,000 = $7,500


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121. The facility expenses in the flexible budget for February would be closest to: A. $13,700 B. $13,401 C. $13,788 D. $12,880 $9,300 + $2.20 x 2,040 = $13,788


122. The activity variance for administrative expenses in February would be closest to: A. $248 U B. $248 F C. $12 U D. $12 F



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123. The spending variance for expendables in February would be closest to: A. $836 F B. $1,360 F C. $836 U D. $1,360 U



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:

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Chapter 010, Flexible Budgets and Performance Analysis Key 124. The net operating income in the planning budget for May would be closest to: A. $9,140 B. $11,626 C. $12,200 D. $8,420




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126. The activity variance for net operating income in May would be closest to: A. $2,770 U B. $720 U C. $720 F D. $2,770 F



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127. 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: A. $3,490 F B. $2,770 F C. $3,490 U D. $2,770 U



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Stent 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 3,000 tenant-days, but its actual level of activity was 2,950 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February:

128. The wages and salaries in the planning budget for February would be closest to: A. $22,670 B. $24,183 C. $23,780 D. $23,000 $3,200 + $6.60 x 3,000 = $23,000


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131. The spending variance for facility expenses in February would be closest to: A. $130 U B. $130 F C. $5 U D. $5 F



Rippelmeyer 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 June, the kennel budgeted for 3,600 tenantdays, but its actual level of activity was 3,550 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for June:

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Chapter 010, Flexible Budgets and Performance Analysis Key 132. The administrative expenses in the planning budget for June would be closest to: A. $7,996 B. $7,885 C. $7,555 D. $7,560 $7,200 + $0.10 x 3,600 = $7,560


133. The expendables in the flexible budget for June would be closest to: A. $33,666 B. $34,270 C. $34,740 D. $34,621 $900 + $9.40 x 3,550 = $34,270


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134. The activity variance for wages and salaries in June would be closest to: A. $310 F B. $110 F C. $310 U D. $110 U



135. The spending variance for expendables in June would be closest to: A. $130 F B. $600 U C. $130 U D. $600 F



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Baugus 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 6,900 units, but its actual level of activity was 6,950 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for August:

136. The direct labor in the planning budget for August would be closest to: A. $27,760 B. $29,190 C. $27,560 D. $28,980 $0 + $4.20 x 6,900 = $28,980


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137. The direct materials in the flexible budget for August would be closest to: A. $127,650 B. $128,575 C. $127,581 D. $129,436 $0 + $18.50 x 6,950 = $128,575


138. The activity variance for direct labor in August would be closest to: A. $1,220 F B. $210 U C. $210 F D. $1,220 U



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139. The revenue variance for August would be closest to: A. $1,450 F B. $1,450 U C. $430 F D. $430 U



140. The spending variance for direct materials in August would be closest to: A. $70 F B. $855 U C. $70 U D. $855 F



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Lampert Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 6,100 units, but its actual level of activity was 6,060 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for March:

141. The selling and administrative expenses in the planning budget for March would be closest to: A. $26,560 B. $27,647 C. $27,466 D. $26,536 $22,900 + $0.60 x 6,100 = $26,560


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142. The manufacturing overhead in the flexible budget for March would be closest to: A. $48,822 B. $51,384 C. $51,440 D. $49,468 $42,900 + $1.40 x 6,060 = $51,384


143. The activity variance for selling and administrative expenses in March would be closest to: A. $906 U B. $906 F C. $24 U D. $24 F



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144. The spending variance for direct materials in March would be closest to: A. $900 F B. $900 U C. $1,376 U D. $1,376 F



Woofter 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 7,600 units, but its actual level of activity was 7,560 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for January:

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Chapter 010, Flexible Budgets and Performance Analysis Key 145. The net operating income in the planning budget for January would be closest to: A. $16,410 B. $16,238 C. $28,604 D. $29,140


146. The net operating income in the flexible budget for January would be closest to: A. $28,604 B. $16,238 C. $16,410 D. $29,140


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147. The activity variance for net operating income in January would be closest to: A. $12,816 F B. $12,816 U C. $536 F D. $536 U



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148. 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 January would be closest to: A. $12,816 F B. $12,280 U C. $12,816 U D. $12,280 F



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Buffaloe 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 5,200 units, but its actual level of activity was 5,250 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for August:

149. The direct labor in the planning budget for August would be closest to: A. $40,040 B. $41,015 C. $40,425 D. $40,624 $0 + $7.70 x 5,200 = $40,040


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150. The manufacturing overhead in the flexible budget for August would be closest to: A. $53,919 B. $55,525 C. $52,896 D. $55,460 $48,700 + $1.30 x 5,250 = $55,525


151. The activity variance for selling and administrative expenses in August would be closest to: A. $690 F B. $690 U C. $20 F D. $20 U



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152. The spending variance for manufacturing overhead in August would be closest to: A. $2,055 F B. $2,055 U C. $2,120 U D. $2,120 F



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:

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Chapter 010, Flexible Budgets and Performance Analysis Key 153. The selling and administrative expenses in the planning budget for February would be closest to: A. $30,490 B. $30,495 C. $30,500 D. $30,190 $29,500 + $0.20 x 5,000 = $30,500


154. The direct materials in the flexible budget for February would be closest to: A. $91,575 B. $95,985 C. $92,500 D. $94,075 $0 + $18.50 x 4,950 = $91,575


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155. The activity variance for direct labor in February would be closest to: A. $340 U B. $760 F C. $340 F D. $760 U



156. The spending variance for direct materials in February would be closest to: A. $3,450 F B. $2,525 U C. $3,450 U D. $2,525 F



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Worden Hospital bases its budgets on patient-visits. The hospital's static budget for February appears below:

157. The total variable cost at the activity level of 4,400 patient-visits per month should be: A. $85,140 B. $87,120 C. $65,120 D. $63,640 Total variable cost = ($6.10 + $8.70) x 4,400 = $65,120


158. The total fixed cost at the activity level of 4,700 patient-visits per month should be: A. $162,620 B. $148,780 C. $93,060 D. $85,140 Total fixed cost = $33,110 + $52,030 = $85,140


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159. The total cost at the activity level of 4,600 patient-visits per month should be: A. $153,720 B. $148,780 C. $153,220 D. $159,160 Total fixed cost = $33,110 + $52,030 = $85,140 Total cost = [($6.10 + $8.70) x 4,600] + $85,140 = $153,220


Dwelmont Hotel bases its budgets on guest-days. The hotel's static budget for May appears below:

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Chapter 010, Flexible Budgets and Performance Analysis Key 160. The total variable cost at the activity level of 2,600 guest-days per month should be: A. $36,920 B. $32,660 C. $45,540 D. $51,480 Total variable cost = ($8.30 + $5.90) x 2,600 = $36,920


161. The total fixed cost at the activity level of 2,900 guest-days per month should be: A. $78,200 B. $57,420 C. $98,600 D. $45,540 Total fixed cost = $27,830 + $17,710 = $45,540


162. The total cost at the activity level of 2,800 guest-days per month should be: A. $95,200 B. $86,230 C. $85,300 D. $78,200 Total fixed cost = $27,830 + $17,710 = $45,540 Total cost = [($8.30 + $5.90) x 2,800] + $45,540 = $85,300


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Springmeyer Clinic uses client-visits as its measure of activity. During August, the clinic budgeted for 2,900 client-visits, but its actual level of activity was 2,940 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for August:

163. The personnel expenses in the planning budget for August would be closest to: A. $69,600 B. $73,800 C. $70,560 D. $73,200 $29,700 + $15 x 2,900 = $73,200


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164. The administrative expenses in the planning budget for August would be closest to: A. $7,594 B. $7,590 C. $7,165 D. $7,264 $7,300 + $0.10 x 2,900 = $7,590


165. The net operating income in the planning budget for August would be closest to: A. $15,416 B. $11,878 C. $11,557 D. $14,560


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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:

166. The personnel expenses in the planning budget for August would be closest to: A. $83,940 B. $88,444 C. $83,310 D. $87,310 $34,800 + $12.60 x 3,900 = $83,940


167. The administrative expenses in the planning budget for August would be closest to: A. $7,780 B. $8,144 C. $8,040 D. $7,770 $7,000 + $0.20 x 3,900 = $7,780


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168. The net operating income in the planning budget for August would be closest to: A. $15,615 B. $15,217 C. $18,705 D. $19,670


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:

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Chapter 010, Flexible Budgets and Performance Analysis Key 169. The medical supplies in the flexible budget for May would be closest to: A. $14,907 B. $15,488 C. $15,207 D. $15,030 $1,500 + $4.10 x 3,270 = $14,907


170. The occupancy expenses in the flexible budget for May would be closest to: A. $14,334 B. $13,840 C. $13,786 D. $14,599 $7,900 + $1.80 x 3,270 = $13,786


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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:

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Chapter 010, Flexible Budgets and Performance Analysis Key 172. The medical supplies in the flexible budget for April would be closest to: A. $21,340 B. $22,600 C. $22,325 D. $21,913 $1,700 + $5.50 x 3,750 = $22,325


173. The occupancy expenses in the flexible budget for April would be closest to: A. $15,575 B. $15,660 C. $14,975 D. $15,377 $9,200 + $1.70 x 3,750 = $15,575


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Lauser Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,690 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for July:

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Chapter 010, Flexible Budgets and Performance Analysis Key 175. The personnel expenses in the planning budget for July would be closest to: A. $54,730 B. $54,641 C. $52,341 D. $52,483 $21,800 + $8.90 x 3,700 = $54,730


176. The occupancy expenses in the flexible budget for July would be closest to: A. $12,466 B. $12,991 C. $12,921 D. $12,480 $7,300 + $1.40 x 3,690 = $12,466


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Higgenbotham Clinic uses client-visits as its measure of activity. During May, the clinic budgeted for 3,600 client-visits, but its actual level of activity was 3,580 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting for May:

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Chapter 010, Flexible Budgets and Performance Analysis Key 178. The administrative expenses in the planning budget for May would be closest to: A. $5,261 B. $5,440 C. $5,232 D. $5,432 $4,000 + $0.40 x 3,600 = $5,440


179. The net operating income in the planning budget for May would be closest to: A. $18,274 B. $13,920 C. $18,479 D. $13,616


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180. The medical supplies in the flexible budget for May would be closest to: A. $20,164 B. $19,340 C. $19,941 D. $19,242 $1,700 + $4.90 x 3,580 = $19,242


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 tenantdays, 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:

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Chapter 010, Flexible Budgets and Performance Analysis Key 181. The wages and salaries in the planning budget for September would be closest to: A. $13,741 B. $13,682 C. $13,781 D. $13,730 $2,000 + $5.10 x 2,300 = $13,730


182. The administrative expenses in the planning budget for September would be closest to: A. $7,362 B. $7,181 C. $7,360 D. $7,212 $6,900 + $0.20 x 2,300 = $7,360


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183. The net operating income in the planning budget for September would be closest to: A. $10,772 B. $6,979 C. $10,866 D. $6,870


Lutts 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 November, the kennel budgeted for 3,800 tenant-days, but its actual level of activity was 3,850 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:

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Chapter 010, Flexible Budgets and Performance Analysis Key 184. The wages and salaries in the planning budget for November would be closest to: A. $27,610 B. $27,280 C. $28,238 D. $28,610 $2,200 + $6.60 x 3,800 = $27,280


185. The administrative expenses in the planning budget for November would be closest to: A. $7,310 B. $7,520 C. $7,540 D. $7,215 $6,000 + $0.40 x 3,800 = $7,520


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186. The net operating income in the planning budget for November would be closest to: A. $12,720 B. $9,648 C. $9,904 D. $13,115


Swader 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 March, the kennel budgeted for 2,900 tenant-days, but its actual level of activity was 2,930 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March:

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Chapter 010, Flexible Budgets and Performance Analysis Key 187. The expendables in the flexible budget for March would be closest to: A. $25,905 B. $25,650 C. $27,274 D. $26,719 $1,000 + $8.50 x 2,930 = $25,905


188. The facility expenses in the flexible budget for March would be closest to: A. $20,700 B. $20,369 C. $20,793 D. $20,820 $9,100 + $4 x 2,930 = $20,820


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189. The net operating income in the flexible budget for March would be closest to: A. $12,522 B. $12,267 C. $9,414 D. $9,120


Whetstine 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 3,200 tenant-days, but its actual level of activity was 3,180 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:

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Chapter 010, Flexible Budgets and Performance Analysis Key 190. The expendables in the flexible budget for September would be closest to: A. $27,630 B. $27,864 C. $27,517 D. $27,800 $600 + $8.50 x 3,180 = $27,630


191. The facility expenses in the flexible budget for September would be closest to: A. $21,320 B. $21,238 C. $21,513 D. $21,784 $8,200 + $4.10 x 3,180 = $21,238


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192. The net operating income in the flexible budget for September would be closest to: A. $8,548 B. $4,967 C. $5,029 D. $8,720


Kalinowski 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 2,300 tenant-days, but its actual level of activity was 2,320 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February:

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Chapter 010, Flexible Budgets and Performance Analysis Key 193. The wages and salaries in the planning budget for February would be closest to: A. $15,570 B. $16,197 C. $16,338 D. $15,688 $2,000 + $5.90 x 2,300 = $15,570




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195. The net operating income in the flexible budget for February would be closest to: A. $10,370 B. $10,608 C. $7,642 D. $7,775


Laboe 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 2,900 tenantdays, but its actual level of activity was 2,940 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting:

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Chapter 010, Flexible Budgets and Performance Analysis Key 196. The administrative expenses in the planning budget for February would be closest to: A. $7,814 B. $7,770 C. $7,922 D. $7,782 $6,900 + $0.30 x 2,900 = $7,770


197. The net operating income in the planning budget for February would be closest to: A. $7,191 B. $7,391 C. $7,900 D. $8,260


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198. The expendables in the flexible budget for February would be closest to: A. $26,990 B. $27,354 C. $27,021 D. $27,772 $600 + $9.10 x 2,940 = $27,354


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:

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Chapter 010, Flexible Budgets and Performance Analysis Key 199. The direct labor in the planning budget for November would be closest to: A. $44,004 B. $42,744 C. $42,633 D. $43,890 $0 + $5.70 x 7,700 = $43,890


200. The selling and administrative expenses in the planning budget for November would be closest to: A. $30,490 B. $29,974 C. $30,504 D. $29,896 $25,100 + $0.70 x 7,700 = $30,490


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201. The net operating income in the planning budget for November would be closest to: A. $35,093 B. $29,340 C. $35,275 D. $29,604


Menson 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 5,800 units, but its actual level of activity was 5,830 units. The company has provided the following data concerning the formulas to be used in its budgeting:

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Chapter 010, Flexible Budgets and Performance Analysis Key 202. The direct labor in the planning budget for December would be closest to: A. $46,057 B. $45,820 C. $43,927 D. $43,701 $0 + $7.90 x 5,800 = $45,820


203. The selling and administrative expenses in the planning budget for December would be closest to: A. $24,898 B. $24,880 C. $23,988 D. $23,865 $21,400 + $0.60 x 5,800 = $24,880


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204. The net operating income in the planning budget for December would be closest to: A. $19,788 B. $24,979 C. $19,380 D. $25,238


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:

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Chapter 010, Flexible Budgets and Performance Analysis Key 205. The direct materials in the flexible budget for August would be closest to: A. $71,020 B. $71,338 C. $72,913 D. $72,264 $0 + $10.60 x 6,730 = $71,338


206. The manufacturing overhead in the flexible budget for August would be closest to: A. $55,358 B. $55,855 C. $55,076 D. $55,040 $47,000 + $1.20 x 6,730 = $55,076


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207. The net operating income in the flexible budget for August would be closest to: A. $22,506 B. $18,317 C. $17,930 D. $22,708


Poulsen Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During July, the company budgeted for 7,300 units, but its actual level of activity was 7,270 units. The company has provided the following data concerning the formulas to be used in its budgeting:

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Chapter 010, Flexible Budgets and Performance Analysis Key 208. The direct materials in the flexible budget for July would be closest to: A. $68,338 B. $70,298 C. $68,620 D. $70,879 $0 + $9.40 x 7,270 = $68,338


209. The manufacturing overhead in the flexible budget for July would be closest to: A. $47,190 B. $47,151 C. $45,344 D. $45,719 $37,700 + $1.30 x 7,270 = $47,151


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Witherington Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 7,800 units, but its actual level of activity was 7,850 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June:

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Chapter 010, Flexible Budgets and Performance Analysis Key 211. The direct labor in the planning budget for June would be closest to: A. $32,970 B. $32,760 C. $34,310 D. $34,091 $0 + $4.20 x 7,800 = $32,760


212. The manufacturing overhead in the flexible budget for June would be closest to: A. $57,435 B. $54,794 C. $57,380 D. $55,498 $48,800 + $1.10 x 7,850 = $57,435


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213. The net operating income in the flexible budget for June would be closest to: A. $34,017 B. $33,585 C. $29,520 D. $30,190


Manago Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 5,300 units, but its actual level of activity was 5,310 units. The company has provided the following data concerning the formulas to be used in its budgeting:|

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Chapter 010, Flexible Budgets and Performance Analysis Key 214. The selling and administrative expenses in the planning budget for March would be closest to: A. $25,640 B. $26,199 C. $26,248 D. $25,648 $21,400 + $0.80 x 5,300 = $25,640


215. The net operating income in the planning budget for March would be closest to: A. $11,705 B. $21,877 C. $21,710 D. $11,749


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216. The direct materials in the flexible budget for March would be closest to: A. $73,278 B. $73,929 C. $73,140 D. $74,208 $0 + $13.80 x 5,310 = $73,278


Bessey Hospital bases its budgets on patient-visits. The hospital's static planning budget for January appears below:

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Chapter 010, Flexible Budgets and Performance Analysis Key 217. The spending variance for supplies costs in the flexible budget performance report for the month is: A. $4,180 F B. $4,180 U C. $2,560 F D. $2,560 U



218. The spending variance for laundry costs in the flexible budget performance report for the month is: A. $730 F B. $2,470 F C. $730 U D. $2,470 U



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219. The spending variance for occupancy costs in the flexible budget performance report for the month is: A. $330 F B. $2,090 F C. $330 U D. $2,090 U



Salling Corporation bases its budgets on machine-hours. The company's static planning budget for May appears below:

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Chapter 010, Flexible Budgets and Performance Analysis Key 220. The spending variance for supplies costs in the flexible budget performance report for the month should be: A. $1,340 U B. $1,340 F C. $460 U D. $460 F



221. The spending variance for power costs in the flexible budget performance report for the month should be: A. $310 U B. $310 F C. $820 U D. $820 F



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222. The spending variance for equipment depreciation in the flexible budget performance report for the month should be: A. $540 F B. $10 F C. $10 U D. $540 U



Genito Corporation's static planning budget for October appears below. The company bases its budgets on machine-hours.

In October, the actual number of machine-hours was 8,800, the actual supplies cost was $69,450, the actual power cost was $34,190, the actual salaries cost was $86,490, and the actual equipment depreciation was $37,600.

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Chapter 010, Flexible Budgets and Performance Analysis Key 223. The spending variance for supplies cost in the flexible budget performance report for the month should be: A. $4,500 F B. $7,110 F C. $7,110 U D. $4,500 U



224. The spending variance for power cost in the flexible budget performance report for the month should be: A. $1,510 F B. $2,770 U C. $1,510 U D. $2,770 F



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225. The spending variance for equipment depreciation in the flexible budget performance report for the month should be: A. $200 U B. $1,120 F C. $200 F D. $1,120 U



Lauter Printing uses two measures of activity, press runs and book set-ups, in the cost formulas in its budgets and performance reports. The cost formula for wages and salaries is $5,300 per month plus $480 per press run plus $1,080 per book set-up. The company expected its activity in October to be 169 press runs and 64 book set-ups, but the actual activity was 167 press runs and 60 book set-ups. The actual cost for wages and salaries in October was $155,690.

226. The wages and salaries in the planning budget for October would be closest to: A. $157,555 B. $155,690 C. $150,260 D. $155,540 $5,300 + $480 x 169 + $1,080 x 64 = $155,540


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227. The wages and salaries in the flexible budget for October would be closest to: A. $155,540 B. $155,690 C. $150,260 D. $153,699 $5,300 + $480 x 167 + $1,080 x 60 = $150,260


228. The activity variance for wages and salaries in October would be closest to: A. $5,280 U B. $150 U C. $150 F D. $5,280 F



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229. The spending variance for wages and salaries in October would be closest to: A. $5,430 U B. $150 U C. $5,430 F D. $150 F



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.

230. The plane operating costs in the planning budget for June would be closest to: A. $239,580 B. $236,840 C. $234,085 D. $243,003 $40,520 + $2,733 x 71 + $11 x 207 = $236,840


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231. The plane operating costs in the flexible budget for June would be closest to: A. $233,504 B. $234,085 C. $239,580 D. $236,840 $40,520 + $2,733 x 70 + $11 x 205 = $234,085


232. The activity variance for plane operating costs in June would be closest to: A. $2,755 U B. $2,755 F C. $2,740 F D. $2,740 U



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233. The spending variance for plane operating costs in June would be closest to: A. $2,740 U B. $5,495 U C. $5,495 F D. $2,740 F



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Essay Questions 234. Immen Corporation bases its budgets on the activity measure customers served. During May, the company planned to serve 38,000 customers. The company has provided the following data concerning the formulas its uses in its budgeting:

The company has also furnished its income statement for May:

Required: Prepare a report showing the company's activity variances for May. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

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235. Faggs Corporation bases its budgets on the activity measure customers served. During December, the company planned to serve 33,000 customers, but actually served 36,000 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 December. Indicate in each case whether the variance is favorable (F) or unfavorable (U).


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236. Brynteson Corporation bases its budgets on the activity measure customers served. During September, the company planned to serve 24,000 customers, but actually served 19,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $2.90q Wages and salaries: $24,700 + $0.90q Supplies: $0.40q Insurance: $4,900 Miscellaneous: $2,800 + $0.10q Required: Prepare a report showing the company's activity variances for September. Indicate in each case whether the variance is favorable (F) or unfavorable (U).


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237. Domin Corporation bases its budgets on the activity measure customers served. During April, the company planned to serve 31,000 customers, but actually served 35,000 customers. Revenue is $4.80 per customer served. Wages and salaries are $33,000 per month plus $1.60 per customer served. Supplies are $1.00 per customer served. Insurance is $12,200 per month. Miscellaneous expenses are $7,400 per month plus $0.20 per customer served. Required: Prepare a report showing the company's activity variances for April. Indicate in each case whether the variance is favorable (F) or unfavorable (U).


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238. 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.

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239. Mulvehill Clinic bases its budgets on the activity measure patient-visits. During June, the clinic planned for 3,000 patient-visits, but the actual level of activity was 3,400 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 June. Indicate in each case whether the variance is favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis Key AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 1 Learning Objective: 2 Level: Easy

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240. 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).

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241. Delamarter Clinic bases its budgets on the activity measure patient-visits. During June, the clinic planned for 2,600 patient-visits, but its actual level of activity was 3,100 patient-visits. Revenue should be $53.40 per patient-visit. Personnel expenses should be $39,700 per month plus $12.60 per patient-visit. Medical supplies should be $1,800 per month plus $10.40 per patient-visit. Occupancy expenses should be $8,200 per month plus $2.30 per patient-visit. Administrative expenses should be $6,100 per month plus $0.20 per patient-visit. Required: Prepare a report showing the clinic's activity variances for June. Indicate in each case whether the variance is favorable (F) or unfavorable (U).


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242. Alicuben Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for October was based on 2,200 meals, but the diner actually served 2,000 meals. The diner's director has provided the following cost formulas to use in budgets:


Required: Prepare a report showing the activity variances for each of the expenses and for total expenses for October. Label each variance as favorable (F) or unfavorable (U).

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243. Aslanian Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for November was based on 2,200 meals, but the diner actually served 2,700 meals. The diner's director has provided the following cost formulas to use in budgets:

Required: Prepare a report showing the activity variances for each of the expenses and for total expenses for November. Label each variance as favorable (F) or unfavorable (U). Label each variance as favorable (F) or unfavorable (U).


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244. 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.

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Chapter 010, Flexible Budgets and Performance Analysis Key AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 1 Learning Objective: 2 Level: Medium

245. Flicker Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for December was based on 2,400 meals, but the diner actually served 2,300 meals. The diner's director has provided the following cost data to use in the budget: groceries, $2.00 per meal; kitchen operations, $5,100 per month plus $1.85 per meal; administrative expenses, $2,900 per month plus $0.65 per meal; and fundraising expenses, $1,000 per month. Required: Prepare a report showing the activity variances for each of the expenses and for total expenses for December. Label each variance as favorable (F) or unfavorable (U).


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246. Lakey Corporation uses customers served as its measure of activity. During July, the company budgeted for 33,000 customers, but actually served 34,000 customers. The company has provided the following data concerning the formulas used in its budgeting and its actual results for July:

Required: Prepare a report showing the company's revenue and spending variances for July. Label each variance as favorable (F) or unfavorable (U).

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247. Mieras Corporation uses customers served as its measure of activity. During January, the company budgeted for 37,000 customers, but actually served 36,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $2.80q Wages and salaries: $22,800 + $0.90q Supplies: $0.50q Insurance: $7,500 Miscellaneous: $3,800 + $0.30q The company reported the following actual results for January:

Required: Prepare a report showing the company's revenue and spending variances for January. Label each variance as favorable (F) or unfavorable (U).

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248. Fuquay Corporation uses customers served as its measure of activity. The company bases its budgets on the following information: Revenue should be $4.80 per customer served. Wages and salaries should be $26,500 per month plus $1.70 per customer served. Supplies should be $0.90 per customer served. Insurance should be $7,100 per month. Miscellaneous expenses should be $4,700 per month plus $0.20 per customer served. The company reported the following actual results for May:

Required: Prepare a report showing the company's revenue and spending variances for May. Label each variance as favorable (F) or unfavorable (U).

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249. Kary Clinic uses patient-visits as its measure of activity. During May, the clinic budgeted for 3,800 patient-visits, but its actual level of activity was 4,100 patient-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for May:

Required: Prepare a report showing the clinic's revenue and spending variances for May. Label each variance as favorable (F) or unfavorable (U).

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250. Gasco Clinic uses patient-visits as its measure of activity. During August, the clinic budgeted for 2,000 patient-visits, but its actual level of activity was 2,100 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits: Revenue: $62.90q Personnel expenses: $28,500 + $20.40q Medical supplies: $1,400 + $9.90q Occupancy expenses: $8,200 + $3.30q Administrative expenses: $4,000 + $0.40q 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).

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251. Braseth Clinic uses patient-visits as its measure of activity. The clinic bases its budgets on the following information: Revenue should be $39.90 per patient-visit. Personnel expenses should be $35,400 per month plus $13.00 per patient-visit. Medical supplies should be $1,100 per month plus $4.90 per patient-visit. Occupancy expenses should be $8,400 per month plus $2.00 per patient-visit. Administrative expenses should be $4,700 per month plus $0.20 per patient-visit. The clinic reported the following actual results for January:

Required: Prepare a report showing the clinic's revenue and spending variances for January. Label each variance as favorable (F) or unfavorable (U).

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252. Villella Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for October was based on 3,800 meals. The diner's director has provided the following cost formulas to use in budgets:


Required: Prepare a report showing the spending variances for each of the expenses and for total expenses for October. Label each variance as favorable (F) or unfavorable (U).

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253. Garing Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for March was based on 3,600 meals. The diner's director has provided the following cost data to use in the budget: groceries, $2.20 per meal; kitchen operations, $4,300 per month plus $1.90 per meal; administrative expenses, $3,300 per month plus $0.20 per meal; and fundraising expenses, $1,000 per month. The director has also provided the diner's statement of actual expenses for the month:

Required: Prepare a report showing the diner's spending variances for each of the expenses and for total expenses for March. Label each variance as favorable (F) or unfavorable (U).

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254. Legorreta Corporation uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of November:

Required: Prepare the company's flexible budget performance report for November. Label each variance as favorable (F) or unfavorable (U).

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AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 1 Learning Objective: 4 Learning Objective: 6 Level: Medium

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255. Duell Clinic uses patient-visits as its measure of activity. The following report compares the planning budget to the actual operating results for the month of January:

Required: Prepare the clinic's flexible budget performance report for January. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis Key AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 1 Learning Objective: 4 Learning Objective: 6 Level: Medium

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256. Squillace Corporation uses customers served as its measure of activity. During October, the company budgeted for 38,000 customers, but actually served 35,000 customers. The company has provided the following data concerning the formulas used in its budgeting and its actual results for October:

Required: Prepare the company's flexible budget performance report for October. Label each variance as favorable (F) or unfavorable (U).

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257. Guy Corporation uses customers served as its measure of activity. During January, the company budgeted for 32,000 customers, but actually served 35,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $4.20q Wages and salaries: $33,900 + $1.40q Supplies: $0.60q Insurance: $10,000 Miscellaneous: $7,000 + $0.40q The company reported the following actual results for January:

Required: Prepare the company's flexible budget performance report for January. Label each variance as favorable (F) or unfavorable (U).

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258. Cotillo Corporation uses customers served as its measure of activity. During December, the company budgeted for 29,000 customers, but actually served 27,000 customers. The company bases its budgets on the following information: Revenue should be $4.40 per customer served. Wages and salaries should be $33,300 per month plus $1.80 per customer served. Supplies should be $0.60 per customer served. Insurance should be $8,900 per month. Miscellaneous expenses should be $4,600 per month plus $0.10 per customer served. The company reported the following actual results for December:

Required: Prepare the company's flexible budget performance report for December. Label each variance as favorable (F) or unfavorable (U).

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259. Thews Clinic uses patient-visits as its measure of activity. During August, the clinic budgeted for 2,000 patient-visits, but its actual level of activity was 2,200 patient-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for August:

Required: Prepare the clinic's flexible budget performance report for August. Label each variance as favorable (F) or unfavorable (U).

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260. Mcgannon Clinic uses patient-visits as its measure of activity. During November, the clinic budgeted for 3,700 patient-visits, but its actual level of activity was 4,100 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits: Revenue: $23.90q Personnel expenses: $20,800 + $7.90q Medical supplies: $800 + $3.50q Occupancy expenses: $6,100 + $1.30q Administrative expenses: $3,100 + $0.10q The clinic reported the following actual results for November:

Required: Prepare the clinic's flexible budget performance report for November. Label each variance as favorable (F) or unfavorable (U).

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261. Vernon Clinic uses patient-visits as its measure of activity. During February, the clinic budgeted for 3,100 patient-visits, but its actual level of activity was 2,800 patient-visits. The clinic bases its budgets on the following information: Revenue should be $30.20 per patientvisit. Personnel expenses should be $20,600 per month plus $9.70 per patient-visit. Medical supplies should be $1,400 per month plus $5.40 per patient-visit. Occupancy expenses should be $5,700 per month plus $1.50 per patient-visit. Administrative expenses should be $2,500 per month plus $0.30 per patient-visit. The clinic reported the following actual results for February:

Required: Prepare the clinic's flexible budget performance report for February. Label each variance as favorable (F) or unfavorable (U).

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262. Gamon Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for April was based on 3,600 meals. The diner's director has provided the following cost formulas to use in budgets:



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263. Wrape Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for April was based on 2,100 meals. The diner's director has provided the following cost data to use in the budget: groceries, $2.55 per meal; kitchen operations, $4,700 per month plus $1.70 per meal; administrative expenses, $3,300 per month plus $0.60 per meal; and fundraising expenses, $1,000 per month. The director has also provided the diner's statement of actual expenses for the month:


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264. 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.


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265. 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.


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266. 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.


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267. During March, Holston Corporation plans to serve 31,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $4.60q Wages and salaries: $36,600 + $1.60q Supplies: $0.80q Insurance: $10,900 Miscellaneous: $8,500 + $0.20q Required: Prepare the company's planning budget for March.


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268. During August, Klinck Corporation plans to serve 33,000 customers. Revenue is $2.50 per customer served. Wages and salaries are $24,300 per month plus $0.90 per customer served. Supplies are $0.30 per customer served. Insurance is $7,100 per month. Miscellaneous expenses are $5,200 per month plus $0.10 per customer served. Required: Prepare the company's planning budget for August.


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269. Novielli Corporation bases its budgets on the activity measure customers served. During November, the company planned to serve 39,000 customers, but actually served 44,000 customers. The company has provided the following data concerning the formulas it uses in its budgeting:

Required: Prepare the company's flexible budget for November based on the actual level of activity for the month.


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270. During September, Booker Corporation budgeted for 20,000 customers, but actually served 22,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served: Revenue: $5.50q Wages and salaries: $28,300 + $1.70q Supplies: $1.00q Insurance: $6,300 Miscellaneous: $5,400 + $0.40q Required: Prepare the company's flexible budget for September based on the actual level of activity for the month.


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271. During July, Bosell Corporation budgeted for 22,000 customers, but actually served 21,000 customers. Revenue should be $6.80 per customer served. Wages and salaries should be $35,900 per month plus $2.40 per customer served. Supplies should be $1.20 per customer served. Insurance should be $12,000 per month. Miscellaneous expenses should be $6,000 per month plus $0.30 per customer served. Required: Prepare the company's flexible budget for July based on the actual level of activity for the month.


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272. Gramling Clinic bases its budgets on patient-visits. During July, the clinic plans for a level of activity of 2,500 patient-visits. The clinic has provided the following data concerning the formulas it uses in its budgeting:

Required: Prepare the clinic's planning budget for July.


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273. During September, Noaks Clinic plans for an activity level of 3,300 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits: Revenue: $30.50q Personnel expenses: $30,900 + $8.40q Medical supplies: $1,200 + $4.50q Occupancy expenses: $6,400 + $1.70q Administrative expenses: $3,700 + $0.10q Required: Prepare the clinic's planning budget for September.


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274. 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 patientvisit. 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.


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275. Clune Clinic bases its budgets on the activity measure patient-visits. During October, the clinic planned for an activity level of 2,100 patient-visits, but the activity level was actually 2,600 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 October based on the actual level of activity for the month.


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276. During October, Moceri Clinic budgeted for 3,000 patient-visits, but its actual level of activity was 3,500 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits: Revenue: $41.80q Personnel expenses: $30,900 + $13.70q Medical supplies: $700 + $7.80q Occupancy expenses: $8,900 + $1.50q Administrative expenses: $3,600 + $0.20q Required: Prepare the clinic's flexible budget for October based on the actual level of activity for the month.


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277. During May, Phong Clinic budgeted for 2,900 patient-visits, but its actual level of activity was 3,100 patient-visits. Revenue should be $31.30 per patient-visit. Personnel expenses should be $23,700 per month plus $8.10 per patient-visit. Medical supplies should be $700 per month plus $6.20 per patient-visit. Occupancy expenses should be $7,000 per month plus $1.50 per patient-visit. Administrative expenses should be $3,400 per month plus $0.40 per patient-visit. Required: Prepare the clinic's flexible budget for May based on the actual level of activity for the month.


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278. Vilanova Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for May is to be based on 2,700 meals. The diner's director has provided the following cost formulas to use in the budget:

Required: Prepare the diner's budget for the month of May. The budget will only contain the costs listed above; no revenues will be on the budget.


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279. Mcduffey Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for September was based on 2,900 meals, but the diner actually served 2,800 meals. The diner's director has provided the following cost formulas to use in budgets:

Required: Prepare the diner's flexible budget for the actual number of meals served in September. The budget will only contain the costs listed above; no revenues will be on the budget.


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280. Korando Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for June is to be based on 2,900 meals. The diner's director has provided the following cost data to use in the budget: groceries, $2.60 per meal; kitchen operations, $4,200 per month plus $1.15 per meal; administrative expenses, $2,800 per month plus $0.65 per meal; and fundraising expenses, $1,000 per month. Required: Prepare the diner's budget for the month of June. The budget will only contain the costs listed above; no revenues will be on the budget.


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281. Salvia Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for May was based on 3,400 meals, but the diner actually served 3,700 meals. The diner's director has provided the following cost data to use in the budget: groceries, $2.90 per meal; kitchen operations, $4,100 per month plus $1.90 per meal; administrative expenses, $2,400 per month plus $0.20 per meal; and fundraising expenses, $1,000 per month. Required: Prepare the diner's flexible budget for the actual number of meals served in May. The budget will only contain the costs listed above; no revenues will be on the budget.


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282. Alarie 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 November, the school budgeted for 1,420 students and 139 courses. The actual activity for the month was 1,220 students and 142 courses. Required: Prepare a report showing the school's activity variances for November. Label each variance as favorable (F) or unfavorable (U).


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283. Eisner 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 October, the school budgeted for 1,490 students and 85 courses. The school's income statement showing the actual results for the month appears below:

Required: Prepare a report showing the school's activity variances for October. Label each variance as favorable (F) or unfavorable (U).

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AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 2 Learning Objective: 5 Level: Hard

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284. Bures 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 360 guests and 134 jeeps. The actual activity for the month was 335 guests and 136 jeeps. Required: Prepare a report showing the company's activity variances for April. Label each variance as favorable (F) or unfavorable (U).

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285. 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).

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286. Ahrns 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 July, the school budgeted for 1,770 students and 148 courses. The school's income statement showing the actual results for the month appears below:

Required: Prepare a report showing the school's revenue and spending variances for July. Label each variance as favorable (F) or unfavorable (U).

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287. 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).

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288. Brink 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 1,710 students and 110 courses. The school's income statement showing the actual results for the month appears below:

Required: Prepare a flexible budget performance report showing both the school's activity variances and revenue and spending variances for June. Label each variance as favorable (F) or unfavorable (U).

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289. Palamino 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 January, the company budgeted for 330 guests and 143 jeeps. The company's income statement showing the actual results for the month appears below:

Required: Prepare a flexible budget performance report showing both the company's activity variances and revenue and spending variances for January. Label each variance as favorable (F) or unfavorable (U).

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290. Alto Clinic uses patient-visits as its measure of activity. The clinic has provided the following report:

Required: Prepare the clinic's flexible budget performance report for June. Label each variance as favorable (F) or unfavorable (U).

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Chapter 010, Flexible Budgets and Performance Analysis Key AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 4 Learning Objective: 6 Level: Hard

291. Drobot 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 November, the school budgeted for 1,470 students and 126 courses. The actual activity for the month was 1,770 students and 122 courses. Required: Prepare the school's planning budget for November.


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292. Hasselman 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 January, the school budgeted for 1,110 students and 105 courses. The actual activity for the month was 1,210 students and 103 courses. Required: Prepare the school's flexible budget for the actual level of activity in January.


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293. Lantrip 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 January, the company budgeted for 356 guests and 174 jeeps. The actual activity for the month was 341 guests and 177 jeeps. Required: Prepare the company's planning budget for January.


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294. Karpin 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 July, the company budgeted for 434 guests and 132 jeeps. The actual activity for the month was 459 guests and 137 jeeps. Required: Prepare the company's flexible budget for the actual level of activity in July.


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10 Flexible BUdgets & Performance Analysis

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