ACCT202 CH 9 SB

Fancy Nails cost formula for electricity is $40 per operating day plus $0.15 per client served. Calculate Fancy Nails' electricity budget in a month when the business is going to be open for 24 days and they expect to serve a total of 2,100 clients.

$1,275

The flexible budget _________ report combines activity and revenue and spending variances.

performance

actual revenue is less than budgeted revenue

unfavorable variance

Given planning budget revenue of $284,000, actual revenue of $275,000, and flexible budget revenue of $290,000, there is a(n) __________ activity variance.

favorable

actual revenue is more than budgeted revenue

favorable variance

subtract planning budget from flexible budget

activity variance

subtract flexible budget from actual results

revenue and spending variances

Fancy Nails cost formula for miscellaneous expense is $30 per operating day plus $0.25 per client served. Fancy Nails' miscellaneous expense budget in a month when the business is going to be open for 25 days and they expect to serve a total of 2,400 clients is $___________.

$1,350

Commission expense is budgeted to be $16,000 at a planned sales level of 4,000 units. If only 2,900 units are sold, how much commission expense will appear on the flexible budget, and is the activity variance favorable or unfavorable? - $11,600 and favorable - $11,600 and unfavorable - $87,000 and unfavorable - $4,400 and favorable

$11,600 and favorable

The performance report shows that the planning revenue was $240,000, the flexible budget revenue was $225,000, and the actual revenue was $230,000. The activity variance is $_______ ______.

$15,000 U

Fancy Nails' budgeted revenue is $20 per manicure. The planning budget for June was based on 2,400 manicures. During June, the actual revenue was $49,750 for 2,500 manicures. The revenue variance for June is ________. - $250 F - $1,750 U - $1,750 F - $250 U

$250 U

A performance report shows that the planning revenue was $200,000, the flexible budget revenue was $225,000, and actual revenue was $223,000. Which of the following statements are true? - The activity variance is $25,000 F. - The revenue variance is $2,000 U. - The activity variance is $25,000 U. - The revenue variance is $2,000 F.

- The activity variance is $25,000 F. - The revenue variance is $2,000 U.

Revenue on the planning budget is expected to be $38,000 for 1,900 client visits. The revenue on the flexible budget is $410,000, showing that there were actually _______ client visits.

20,500

The difference between a revenue or cost item in the planning budget and the same item in the flexible budget at the actual level of activity is a(n) ________ variance.

activity

The difference between a revenue or cost item in the planning budget and the same item in the flexible budget at the actual level of activity is a(n) ______________ variance. - revenue - spending - activity

activity

The spending variance is labeled as favorable when the _______. - actual cost is less than what the cost should have been at the actual level of activity - actual cost is less than what the cost should have been at the planned level of activity - actual cost is more than what the cost should have been at the actual level of activity - amount spent is less that what was spent last period

actual cost is less than what the cost should have been at the actual level of activity

The spending variance is the ___________. - difference between what a cost should have been at the actual level of activity and the actual amount of the cost - projected amount to be spent on a cost - difference between the budgeted cost at the budgeted level of activity and the actual amount of the cost - actual amount spent on a cost

difference between what a cost should have been at the actual level of activity and the actual amount of the cost

When actual revenue _______ what the revenue should have been, the variance is labeled favorable. - exceeds - is equal to - is less than

exceeds

The difference between how much a cost should have been, given the actual level of activity, and the actual amount of the cost is a(n) ________ variance.

spending

If the actual cost is greater than what the cost SHOULD have been, the variance is labeled as __________.

unfavorable

If the activity level for the month is 4,000 units, actual revenue is $6,000, actual variable costs are $0.20 unit, and actual fixed costs total $500, which of the following are true? - $800 in total costs - $4,200 net income - $4,700 net income - $1,300 in total costs

- $4,700 net income - $1,300 in total costs

The planning budget, based on 1,000 units, shows revenue of $24,000 and $6,250 for supplies. A total of 1,200 units were actually produced and sold. The flexible budget will show ________. - $7,500 units for supplies - $28,800 revenue - $6,250 for supplies - $24,000 revenue

- $7,500 units for supplies - $28,800 revenue

The concept that focuses on important variances and ignores trivial ones is ____________. - management by exception - the variance analysis cycle - flexible budgeting - static budgeting

management by exception

The system that compares actual results to a budget so that significant deviations can be flagged and investigated further is called _________ ________ ________.

management by exception