ACC 255 Chapter 9

Piechocki 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 7,100 units, but its actual level of activity was 7,050 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: Fixed element per monthVariable element per unitRevenue - $34.60 Direct labor$0 $6.60Direct materials 0 13.10Manufacturing overhead 41,000 2.10Selling and administrative expenses 25,900 0.60Total expenses$66,900 $22.40 Actual results for May: Revenue$244,930Direct labor$46,320Direct materials$93,535Manufacturing overhead$45,500Selling and administrative expenses$30,510 The revenue variance for May would be closest to:

$1,000 F

Paulis 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 3,700 tenant-days, but its actual level of activity was 3,680 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting: Fixed element per monthVariable element per tenant-dayRevenue - $30.20 Wages and salaries$2,700 $6.20Food and supplies 900 11.00Facility expenses 7,700 3.20Administrative expenses 7,500 0.20Total expenses$18,800 $20.60 Actual results for February: Revenue$107,480Wages and salaries$23,470Food and supplies$36,787Facility expenses$19,220Administrative expenses$9,134 The net operating income in the flexible budget for February would be closest to:

$16,528

Courington Detailing's cost formula for its materials and supplies is $1,900 per month plus $9 per vehicle. For the month of August, the company planned for activity of 85 vehicles, but the actual level of activity was 50 vehicles. The actual materials and supplies for the month was $2,530. The spending variance for materials and supplies in August would be closest to:

$180 U

Groupe 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 $36,170 per month plus $2,044 per flight plus $1 per passenger. The company expected its activity in October to be 77 flights and 227 passengers, but the actual activity was 76 flights and 232 passengers. The actual cost for plane operating costs in October was $190,500. The activity variance for plane operating costs in October would be closest to:

$2,039 F

Dubberly Corporation's cost formula for its manufacturing overhead is $32,000 per month plus $50 per machine-hour. For the month of March, the company planned for activity of 7,800 machine-hours, but the actual level of activity was 7,750 machine-hours. The actual manufacturing overhead for the month was $446,090. The activity variance for manufacturing overhead in March would be closest to:

$2,500 F

Dubberly Corporation's cost formula for its manufacturing overhead is $32,200 per month plus $66 per machine-hour. For the month of March, the company planned for activity of 7,840 machine-hours, but the actual level of activity was 7,770 machine-hours. The actual manufacturing overhead for the month was $573,970. The spending variance for manufacturing overhead in March would be closest to:

$28,950 U

Wember 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 $600 per month plus $83 per job plus $11 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 September to be 28 jobs and 146 meals, but the actual activity was 24 jobs and 143 meals. The actual cost for catering supplies in September was $4,110. The catering supplies in the planning budget for September would be closest to:

$4,530

Rhed 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 December, the kennel budgeted for 4,300 tenant-days, but its actual level of activity was 4,250 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting: Fixed element per monthVariable element per tenant-dayRevenue - $35.10 Wages and salaries$3,400 $8.90Food and supplies 2,000 14.10Facility expenses 9,400 5.60Administrative expenses 7,400 0.80Total expenses$22,200 $29.40 Actual results for December: Revenue$148,435Wages and salaries$41,510Food and supplies$60,835Facility expenses$33,360Administrative expenses$8,840 The activity variance for administrative expenses in December would be closest to:

$40 F

Guareno Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,450 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting: Fixed element per monthVariable element per client-visitRevenue - $45.20 Personnel expenses$34,300 $13.30Medical supplies 1,600 5.40Occupancy expenses 10,000 1.80Administrative expenses 3,800 0.20Total expenses$49,700 $20.70 Actual results for December: Revenue$108,650 Personnel expenses$65,755Medical supplies$14,380Occupancy expenses$14,000Administrative expenses$4,210 The spending variance for medical supplies in December would be closest to:

$450 F

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: Fixed element per monthVariable element per tenant-dayRevenue - $28.00 Wages and salaries$2,700 $5.40Food and supplies 500 10.20Facility expenses 9,600 3.30Administrative expenses 6,600 0.20Total expenses$19,400 $19.10 Actual results for November: Revenue$90,470Wages and salaries$20,606Food and supplies$35,838Facility expenses$20,857Administrative expenses$7,518 The activity variance for wages and salaries in November would be closest to:

$54 F

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: Fixed element per monthVariable element per client-visitRevenue - $68.20 Personnel expenses$32,300 $21.50Medical supplies 1,200 12.50Occupancy expenses 9,700 3.40Administrative expenses 5,000 0.10Total expenses$48,200 $37.50 Actual results for February: Revenue$156,210 Personnel expenses$80,445Medical supplies$30,105Occupancy expenses$16,800Administrative expenses$5,015 The spending variance for medical supplies in February would be closest to:

$780 U

Bade Midwifery's cost formula for its wages and salaries is $1,340 per month plus $230 per birth. For the month of October, the company planned for activity of 114 births, but the actual level of activity was 110 births. The actual wages and salaries for the month was $27,592. The activity variance for wages and salaries in October would be closest to:

$920 F

Dermody Snow Removal's cost formula for its vehicle operating cost is $2,970 per month plus $327 per snow-day. For the month of December, the company planned for activity of 21 snow-days, but the actual level of activity was 19 snow-days. The actual vehicle operating cost for the month was $10,130. The spending variance for vehicle operating cost in December would be closest to:

$947 U

Piechocki 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 7,700 units, but its actual level of activity was 7,650 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: Fixed element per monthVariable element per unitRevenue - $35.20 Direct labor$0 $5.80Direct materials 0 12.80Manufacturing overhead 34,000 1.50Selling and administrative expenses 26,500 0.50Total expenses$60,500 $20.60 Actual results for May: Revenue$270,800Direct labor$44,210Direct materials$99,995Manufacturing overhead$48,500Selling and administrative expenses$30,570 The direct materials in the flexible budget for May would be closest to:

$97,920

Courington Detailing's cost formula for its materials and supplies is $2,040 per month plus $9 per vehicle. For the month of August, the company planned for activity of 99 vehicles, but the actual level of activity was 59 vehicles. The actual materials and supplies for the month was $2,890. The materials and supplies in the planning budget for August would be closest to:

Answer: $2,931 Cost = Fixed cost + (Variable cost per unit × q) = $2,040 + ($9 × 99) = $2,931