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Furney Clinic uses patient-visits as its measure of activity. During May, the clinic budgeted for 3,400 patient-visits, but its actual level of activity was 3,000 patient-visits. The clinic bases its budgets on the following information: Revenue should be $38.00 per patient-visit. Personnel expenses should be $36,000 per month plus $10.80 per patient-visit. Medical supplies should be $1,000 per month plus $6.00 per patient-visit. Occupancy expenses should be $9,300 per month plus $2.00 per patient-visit. Administrative expenses should be $5,500 per month plus $0.30 per patient-visit. The clinic reported the following actual results for May: Furney Clinic uses patient-visits as its measure of activity. During May, the clinic budgeted for 3,400 patient-visits, but its actual level of activity was 3,000 patient-visits. The clinic bases its budgets on the following information: Revenue should be $38.00 per patient-visit. Personnel expenses should be $36,000 per month plus $10.80 per patient-visit. Medical supplies should be $1,000 per month plus $6.00 per patient-visit. Occupancy expenses should be $9,300 per month plus $2.00 per patient-visit. Administrative expenses should be $5,500 per month plus $0.30 per patient-visit. The clinic reported the following actual results for May: Required: Prepare the clinic's flexible budget performance report for May. Label each variance as favorable (F) or unfavorable (U). Required: Prepare the clinic's flexible budget performance report for May. Label each variance as favorable (F) or unfavorable (U).

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Hallet Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, 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 used in its budgeting and its actual results for May: Data used in budgeting: Hallet Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, 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 used in its budgeting and its actual results for May: Data used in budgeting: Actual results for May: The net operating income in the planning budget for May would be closest to: A) $23,380 B) $23,878 C) $29,711 D) $29,406 Actual results for May: Hallet Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, 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 used in its budgeting and its actual results for May: Data used in budgeting: Actual results for May: The net operating income in the planning budget for May would be closest to: A) $23,380 B) $23,878 C) $29,711 D) $29,406 The net operating income in the planning budget for May would be closest to:


A) $23,380
B) $23,878
C) $29,711
D) $29,406

E) B) and D)
F) B) and C)

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Milot Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for April. Milot Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for April. When the company prepared its planning budget at the beginning of April, it assumed that 32 wells would have been serviced. However, 29 wells were actually serviced during April. The amount shown for revenue in the planning budget for April would have been closest to: A) $110,200 B) $121,600 C) $112,900 D) $124,579 When the company prepared its planning budget at the beginning of April, it assumed that 32 wells would have been serviced. However, 29 wells were actually serviced during April. The amount shown for revenue in the planning budget for April would have been closest to:


A) $110,200
B) $121,600
C) $112,900
D) $124,579

E) A) and B)
F) B) and D)

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Kirnon 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 $300 per month plus $114 per job plus $16 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 October to be 27 jobs and 224 meals, but the actual activity was 29 jobs and 227 meals. The actual cost for catering supplies in October was $7,500. The activity variance for catering supplies in October would be closest to:


A) $276 F
B) $276 U
C) $538 U
D) $538 F

E) A) and D)
F) A) and C)

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Difabio 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: Difabio 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 1,070 students and 90 courses. The actual activity for the month was 1,370 students and 95 courses. Required: Prepare the school's flexible budget for the actual level of activity in June. In June, the school budgeted for 1,070 students and 90 courses. The actual activity for the month was 1,370 students and 95 courses. Required: Prepare the school's flexible budget for the actual level of activity in June.

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Fixed costs should not be ignored when evaluating how well a manager has controlled costs.

A) True
B) False

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Malander 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 3,400 tenant-days, but its actual level of activity was 3,390 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting: Malander 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 3,400 tenant-days, but its actual level of activity was 3,390 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting: Actual results for November: The food and supplies in the flexible budget for November would be closest to: A) $35,180 B) $35,078 C) $35,944 D) $35,733 Actual results for November: Malander 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 3,400 tenant-days, but its actual level of activity was 3,390 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting: Actual results for November: The food and supplies in the flexible budget for November would be closest to: A) $35,180 B) $35,078 C) $35,944 D) $35,733 The food and supplies in the flexible budget for November would be closest to:


A) $35,180
B) $35,078
C) $35,944
D) $35,733

E) A) and D)
F) None of the above

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Chimilio Clinic uses client-visits as its measure of activity. During June, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,360 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Chimilio Clinic uses client-visits as its measure of activity. During June, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,360 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Actual results for January: The net operating income in the flexible budget for June would be closest to: A) $8,957 B) $11,152 C) $11,780 D) $8,748 Actual results for January: Chimilio Clinic uses client-visits as its measure of activity. During June, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,360 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Actual results for January: The net operating income in the flexible budget for June would be closest to: A) $8,957 B) $11,152 C) $11,780 D) $8,748 The net operating income in the flexible budget for June would be closest to:


A) $8,957
B) $11,152
C) $11,780
D) $8,748

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

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Fager Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,250 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting: Fager Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,250 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting: Actual results for February: The personnel expenses in the planning budget for February would be closest to: A) $80,675 B) $80,445 C) $79,600 D) $78,657 Actual results for February: Fager Clinic uses client-visits as its measure of activity. During February, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,250 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting: Actual results for February: The personnel expenses in the planning budget for February would be closest to: A) $80,675 B) $80,445 C) $79,600 D) $78,657 The personnel expenses in the planning budget for February would be closest to:


A) $80,675
B) $80,445
C) $79,600
D) $78,657

E) All of the above
F) A) and C)

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Gordin 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 3,000 tenant-days, but its actual level of activity was 3,020 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Gordin 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 3,000 tenant-days, but its actual level of activity was 3,020 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Actual results for May: The administrative expenses in the planning budget for May would be closest to: A) $6,300 B) $6,302 C) $6,121 D) $6,162 Actual results for May: Gordin 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 3,000 tenant-days, but its actual level of activity was 3,020 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Actual results for May: The administrative expenses in the planning budget for May would be closest to: A) $6,300 B) $6,302 C) $6,121 D) $6,162 The administrative expenses in the planning budget for May would be closest to:


A) $6,300
B) $6,302
C) $6,121
D) $6,162

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

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Dinham 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 2,000 tenant-days, but its actual level of activity was 2,040 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Dinham 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 2,000 tenant-days, but its actual level of activity was 2,040 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Actual results for March: The spending variance for food and supplies in March would be closest to: A) $208 F B) $280 U C) $208 U D) $280 F Actual results for March: Dinham 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 2,000 tenant-days, but its actual level of activity was 2,040 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Actual results for March: The spending variance for food and supplies in March would be closest to: A) $208 F B) $280 U C) $208 U D) $280 F The spending variance for food and supplies in March would be closest to:


A) $208 F
B) $280 U
C) $208 U
D) $280 F

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

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Milot Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for April. Milot Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for April. When the company prepared its planning budget at the beginning of April, it assumed that 32 wells would have been serviced. However, 29 wells were actually serviced during April. The activity variance for total expenses for April would have been closest to: A) $4,200 F B) $1,000 F C) $1,000 U D) $4,200 U When the company prepared its planning budget at the beginning of April, it assumed that 32 wells would have been serviced. However, 29 wells were actually serviced during April. The activity variance for total expenses for April would have been closest to:


A) $4,200 F
B) $1,000 F
C) $1,000 U
D) $4,200 U

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

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Bracken Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,100 client-visits, but its actual level of activity was 2,140 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for September: Data used in budgeting: Bracken Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,100 client-visits, but its actual level of activity was 2,140 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for September: Data used in budgeting: Actual results for September: The spending variance for medical supplies in September would be closest to: A) $392 F B) $680 U C) $680 F D) $392 U Actual results for September: Bracken Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,100 client-visits, but its actual level of activity was 2,140 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for September: Data used in budgeting: Actual results for September: The spending variance for medical supplies in September would be closest to: A) $392 F B) $680 U C) $680 F D) $392 U The spending variance for medical supplies in September would be closest to:


A) $392 F
B) $680 U
C) $680 F
D) $392 U

E) B) and C)
F) B) and D)

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Schoening Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for January. Schoening Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for January. When the company prepared its planning budget at the beginning of January, it assumed that 40 containers would have been refurbished. However, 38 containers were actually refurbished during January. The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for January would have been closest to: A) $5,400 U B) $2,800 U C) $5,400 F D) $2,800 F When the company prepared its planning budget at the beginning of January, it assumed that 40 containers would have been refurbished. However, 38 containers were actually refurbished during January. The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for January would have been closest to:


A) $5,400 U
B) $2,800 U
C) $5,400 F
D) $2,800 F

E) All of the above
F) A) and C)

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Lasserre Clinic uses patient-visits as its measure of activity. During November, the clinic budgeted for 2,800 patient-visits, but its actual level of activity was 3,000 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits: Revenue: $50.40q Personnel expenses: $36,200 + $15.60q Medical supplies: $1,500 + $8.80q Occupancy expenses: $8,700 + $2.80q Administrative expenses: $4,300 + $0.40q The clinic reported the following actual results for November: Lasserre Clinic uses patient-visits as its measure of activity. During November, the clinic budgeted for 2,800 patient-visits, but its actual level of activity was 3,000 patient-visits. The clinic uses the following revenue and cost formulas in its budgeting, where q is the number of patient-visits: Revenue: $50.40q Personnel expenses: $36,200 + $15.60q Medical supplies: $1,500 + $8.80q Occupancy expenses: $8,700 + $2.80q Administrative expenses: $4,300 + $0.40q 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). Required: Prepare the clinic's flexible budget performance report for November. Label each variance as favorable (F) or unfavorable (U).

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Kaina Clinic uses client-visits as its measure of activity. During May, 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 May: Data used in budgeting: Kaina Clinic uses client-visits as its measure of activity. During May, 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 May: Data used in budgeting: Actual results for May: The activity variance for administrative expenses in May would be closest to: A) $6 U B) $6 F C) $194 U D) $194 F Actual results for May: Kaina Clinic uses client-visits as its measure of activity. During May, 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 May: Data used in budgeting: Actual results for May: The activity variance for administrative expenses in May would be closest to: A) $6 U B) $6 F C) $194 U D) $194 F The activity variance for administrative expenses in May would be closest to:


A) $6 U
B) $6 F
C) $194 U
D) $194 F

E) None of the above
F) A) and B)

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Ocean Corporation uses customers served as its measure of activity. During June, the company budgeted for 21,000 customers, but actually served 19,000 customers. The company bases its budgets on the following information: Revenue should be $5.00 per customer served. Wages and salaries should be $24,900 per month plus $1.80 per customer served. Supplies should be $0.90 per customer served. Insurance should be $6,500 per month. Miscellaneous expenses should be $3,500 per month plus $0.40 per customer served. The company reported the following actual results for June: Ocean Corporation uses customers served as its measure of activity. During June, the company budgeted for 21,000 customers, but actually served 19,000 customers. The company bases its budgets on the following information: Revenue should be $5.00 per customer served. Wages and salaries should be $24,900 per month plus $1.80 per customer served. Supplies should be $0.90 per customer served. Insurance should be $6,500 per month. Miscellaneous expenses should be $3,500 per month plus $0.40 per customer served. The company reported the following actual results for June: Required: Prepare the company's flexible budget performance report for June. Label each variance as favorable (F) or unfavorable (U). Required: Prepare the company's flexible budget performance report for June. Label each variance as favorable (F) or unfavorable (U).

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A flexible budget report should exclude variable costs because they can be expected to change with a change in the level of activity.

A) True
B) False

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Milot Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for April. Milot Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for April. When the company prepared its planning budget at the beginning of April, it assumed that 32 wells would have been serviced. However, 29 wells were actually serviced during April. The spending variance for Other expenses for April would have been closest to: A) $600 F B) $3,124 F C) $3,124 U D) $600 U When the company prepared its planning budget at the beginning of April, it assumed that 32 wells would have been serviced. However, 29 wells were actually serviced during April. The spending variance for "Other expenses" for April would have been closest to:


A) $600 F
B) $3,124 F
C) $3,124 U
D) $600 U

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

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Benjamin Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Benjamin Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. When the company prepared its planning budget at the beginning of March, it assumed that 26 containers would have been refurbished. However, 23 containers were actually refurbished during March. The amount shown for net operating income in the planning budget for March would have been closest to: A) ($700) B) ($791) C) $6,700 D) ($4,400) When the company prepared its planning budget at the beginning of March, it assumed that 26 containers would have been refurbished. However, 23 containers were actually refurbished during March. The amount shown for net operating income in the planning budget for March would have been closest to:


A) ($700)
B) ($791)
C) $6,700
D) ($4,400)

E) B) and C)
F) None of the above

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