Accounting Chapter 8 28 During May, Cockrel Corporation plans to serve 34,000

8-981

373.

During February, Oshell Clinic budgeted for 3,600 patient-visits, but its actual level of

activity was 3,200 patient-visits. The clinic uses the following revenue and cost formulas in

its budgeting, where q is the number of patient-visits:

Revenue: $28.80q

Personnel expenses: $22,500 + $9.90q

Medical supplies: $1,200 + $4.70q

Occupancy expenses: $6,700 + $1.30q

Administrative expenses: $4,800 + $0.20q

Required:

Prepare the clinic’s flexible budget for February based on the actual level of activity for

the month.

8-982

8-983

374.

During April, Cheatam Corporation budgeted for 27,000 customers, but actually served

23,000 customers. The company uses the following revenue and cost formulas in its

budgeting, where q is the number of customers served:

Revenue: $4.10q

Wages and salaries: $33,300 + $1.10q

Supplies: $0.70q

Insurance: $8,600

Miscellaneous expense: $3,700 + $0.40q

Required:

Prepare the company’s flexible budget for April based on the actual level of activity for the

month.

8-984

8-985

375.

Sund Corporation bases its budgets on the activity measure customers served. During

April, the company plans to serve 38,000 customers. The company has provided the

following data concerning the formulas it uses in its budgeting:

Fixed element per

month

Variable element per

customer

Revenue

–

$2.10

Wages and salaries

$25,000

$0.50

Supplies

$0

$0.30

Insurance

$6,200

$0.00

Miscellaneous

expense

$2,500

$0.40

Budgeted customers served

(q)

Revenue ($2.10q)

Expenses:

Total expense

Required:

Prepare the company’s planning budget for April.

8-986

8-987

376.

During May, Cockrel Corporation plans to serve 34,000 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: $25,400 + $0.90q

Supplies: $0.40q

Insurance: $7,000

Miscellaneous expense: $4,900 + $0.30q

Required:

Prepare the company’s planning budget for May.

8-988

8-989

7.

company budgeted for 26,000 customers, but actually served 23,000 customers. The company

bases its budgets on the following information: Revenue should be $2.80 per customer served.

Wages and salaries should be $22,100 per month plus $0.70 per customer served. Supplies

should be $0.50 per customer served. Insurance should be $5,200 per month. Miscellaneous

expenses should be $2,100 per month plus $0.30 per customer served. The company reported

the following actual results for June:

Revenue

$63,800

Wages and salaries

$37,100

Supplies

$9,900

Insurance

$5,400

Miscellaneous expense

$6,200

Required:

Prepare a report showing the company’s revenue and spending variances for June. Label each

variance as favorable (F) or unfavorable (U).

8-990

8-991

378.

Bruess Clinic uses patient-visits as its measure of activity. During July, the clinic budgeted

for 2,700 patient-visits, but its actual level of activity was 3,200 patient-visits. The clinic

uses the following revenue and cost formulas in its budgeting, where q is the number of

patient-visits:

Revenue: $49.60q

Personnel expenses: $31,200 + $15.10q

Medical supplies: $700 + $9.60q

Occupancy expenses: $10,000 + $2.00q

Administrative expenses: $7,000 +

$0.20q

The clinic reported the following actual results for July:

Revenue

$165,680

Personnel expenses

$76,190

Medical supplies

$31,790

Occupancy expenses

$15,960

Administrative expenses

$7,600

($49.60q)

Required:

Prepare a report showing the clinic’s revenue and spending variances for July. Label each

variance as favorable (F) or unfavorable (U).

8-992

8-993

379.

Kestner Clinic uses patient-visits as its measure of activity. During September, the clinic

budgeted for 3,000 patient-visits, but its actual level of activity was 2,900 patient-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:

Fixed element per

month

Variable element per patient-

visit

Revenue

–

$37.20

Personnel expenses

$27,600

$11.30

Medical supplies

$1,500

$6.80

Occupancy expenses

$6,200

$1.70

Administrative

expenses

$3,600

$0.30

Actual results for September:

Revenue

$105,010

Personnel expenses

$61,020

Medical supplies

$22,120

Occupancy expenses

$10,930

Administrative expenses

$4,570

Required:

Prepare a report showing the clinic’s revenue and spending variances for September.

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

8-994

8-995

380.

Satoe Corporation uses customers served as its measure of activity. During April, the

company budgeted for 25,000 customers, but actually served 23,000 customers. The

company has provided the following data concerning the formulas used in its budgeting

and its actual results for April:

Data used in budgeting:

Fixed

element

per

month

Variable

element

per

customer

Revenue

–

$3.00

Wages and

salaries

$23,500

$0.80

Supplies

$0

$0.60

Insurance

$4,700

$0.00

Miscellaneous

expense

$3,600

$0.20

Actual results for April:

Revenue

$70,000

Wages and salaries

$42,800

Supplies

$11,100

Insurance

$4,500

Miscellaneous expense

$9,300

Required:

Prepare a report showing the company’s revenue and spending variances for April. Label

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

8-996

8-997

381.

Lueders Memorial Diner is a charity supported by donations that provides free meals to

the homeless. The diner’s budget for April was based on 3,800 meals. The diner’s director

has provided the following cost formulas to use in budgets:

Fixed element per

month

Variable element per

meal

Groceries

$0

$2.15

Kitchen operations

$5,400

$1.85

Administrative

expenses

$2,000

$0.65

Fundraising expenses

$1,300

$0.00

The director has also provided the diner’s statement of actual expenses for the month:

Lueders Memorial Diner

Statement of Expenses

For the Month Ended April 30

Actual meals

4,100

Groceries

$8,645

Kitchen operations

12,435

Administrative expenses

4,605

Fundraising expenses

1,320

Total expense

$27,005

Required:

Prepare a report showing the revenue and spending variances for each of the expenses

and for total expenses for April. Label each variance as favorable (F) or unfavorable (U).

8-998

8-999

382.

Rothrock Clinic uses patient-visits as its measure of activity. During December, the clinic

budgeted for 3,400 patient-visits, but its actual level of activity was 3,200 patient-visits.

The clinic bases its budgets on the following information: Revenue should be $26.20 per

patient-visit. Personnel expenses should be $28,200 per month plus $6.70 per patient-

visit. Medical supplies should be $1,500 per month plus $3.30 per patient-visit. Occupancy

expenses should be $6,800 per month plus $1.00 per patient-visit. Administrative

expenses should be $5,000 per month plus $0.20 per patient-visit. The clinic reported the

following actual results for December:

Revenue

$87,930

Personnel expenses

$48,040

Medical supplies

$12,010

Occupancy expenses

$10,270

Administrative expenses

$5,840

Patient-visits (q)

Revenue ($26.20q)

Expenses:

Required:

Prepare a report showing the clinic’s revenue and spending variances for December.

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

8-1000