Accounting Chapter 8 29 Prepare Report Showing Revenue And Spending Variances level

8-1001

383.

Halm Urban Diner is a charity supported by donations that provides free meals to the

homeless. The diner’s budget for August was based on 3,000 meals. The diner’s director

has provided the following cost data to use in the budget: groceries, $3.85 per meal;

kitchen operations, $4,600 per month plus $1.15 per meal; administrative expenses, $3,800

per month plus $0.85 per meal; and fundraising expenses, $1,600 per month. The director

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

Halm Urban Diner

Statement of Expenses

For the Month Ended August 31

Actual meals

2,900

Groceries

$10,735

Kitchen operations

8,155

Administrative expenses

6,305

Fundraising expenses

1,620

Total expense

$26,815

Groceries ($3.85q)

Required:

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

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

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8-1003

384.

Camcam Corporation uses customers served as its measure of activity. During July, the

company budgeted for 26,000 customers, but actually served 30,000 customers. The

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

number of customers served:

Revenue: $4.90q

Wages and salaries: $34,400 + $1.60q

Supplies: $1.00q

Insurance: $8,500

Miscellaneous expense: $5,600 + $0.20q

The company reported the following actual results for July:

Revenue

$148,800

Wages and salaries

$82,000

Supplies

$28,600

Insurance

$8,100

Miscellaneous expense

$10,600

Required:

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

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

8-1004

8-1005

385.

Cicchetti 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

December:

Cicchetti Corporation

Comparison of Actual Results to Planning

Budget

For the Month Ended December 31

Actual

Results

Planning

Budget

Variances

Customers

served

36,000

33,000

Revenue

($4.80q)

$173,000

$158,400

$14,600 F

Expenses:

Wages and

salaries

($36,900 +

$1.60q)

96,900

89,700

7,200 U

Supplies

($0.90q)

31,900

29,700

2,200 U

Insurance

($13,300)

13,500

13,300

200 U

Miscellaneous

expense ($6,300

+ $0.40q)

22,300

19,500

2,800 U

Total expense

164,600

152,200

12,400 U

Net operating

income

$8,400

$6,200

$2,200 F

Required:

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

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

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8-1007

8-1008

386.

Paye 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:

Paye Clinic

Comparison of Actual Results to Planning Budget

For the Month Ended January 31

Actual

Results

Planning

Budget

Variances

Patient-visits

3,600

3,900

Revenue ($33.50q)

$120,410

$130,650

$10,240 U

Expenses:

Personnel expenses ($30,800 + $10.60q)

69,990

72,140

2,150 F

Medical supplies ($2,100 + $5.40q)

21,990

23,160

1,170 F

Occupancy expenses ($7,600 + $1.20q)

11,810

12,280

470 F

Administrative expenses ($5,900 +

$0.30q)

6,770

7,070

300 F

Total expense

110,560

114,650

4,090 F

Net operating income

$9,850

$16,000

$6,150 U

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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8-1010

387.

Payeur Corporation uses customers served as its measure of activity. The company bases

its budgets on the following information: Revenue should be $4.50 per customer served.

Wages and salaries should be $38,300 per month plus $1.40 per customer served.

Supplies should be $0.80 per customer served. Insurance should be $10,100 per month.

Miscellaneous expenses should be $5,400 per month plus $0.40 per customer served.

The company reported the following actual results for December:

Customers served

31,000

Revenue

$138,100

Wages and salaries

$82,900

Supplies

$26,200

Insurance

$9,800

Miscellaneous expense

$20,400

($4.50q)

Required:

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

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

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8-1012

388.

Hartz Urban Diner is a charity supported by donations that provides free meals to the

homeless. The diner’s budget for July was based on 3,100 meals. The diner’s director has

provided the following cost data to use in the budget: groceries, $2.50 per meal; kitchen

operations, $4,700 per month plus $1.75 per meal; administrative expenses, $2,200 per

month plus $0.85 per meal; and fundraising expenses, $1,700 per month. The director has

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

Hartz Urban Diner

Statement of Expenses

For the Month Ended July 31

Actual meals

2,700

Groceries

$6,540

Kitchen operations

9,065

Administrative expenses

4,715

Fundraising expenses

1,620

Total expense

$21,940

Required:

Prepare a report showing the diner’s spending variances for each of the expenses and for

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

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8-1014

389.

Toadvine Clinic uses patient-visits as its measure of activity. During April, the clinic

budgeted for 3,800 patient-visits, but its actual level of activity was 3,400 patient-visits.

The clinic uses the following revenue and cost formulas in its budgeting, where q is the

number of patient-visits:

Revenue: $39.70q

Personnel expenses: $38,700 + $11.50q

Medical supplies: $1,000 + $7.30q

Occupancy expenses: $11,700 + $1.30q

Administrative expenses: $6,700 + $0.30q

The clinic reported the following actual results for April:

Revenue

$132,280

Personnel expenses

$76,500

Medical supplies

$26,300

Occupancy expenses

$16,210

Administrative expenses

$7,620

Required:

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

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

8-1016

390.

Carvana 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 3,100 patient-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

month

Variable element per patient-

visit

Revenue

–

$39.20

Personnel expenses

$38,600

$9.90

Medical supplies

$1,700

$5.90

Occupancy expenses

$8,200

$2.00

Administrative

expenses

$6,400

$0.40

Actual results for December:

Revenue

$118,750

Personnel expenses

$72,220

Medical supplies

$20,080

Occupancy expenses

$13,790

Administrative expenses

$7,520

Required:

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

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

8-1018

391.

Vangemert Corporation uses customers served as its measure of activity. During June, the

company budgeted for 22,000 customers, but actually served 25,000 customers. The

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

number of customers served:

Revenue: $5.30q

Wages and salaries: $35,400 + $1.90q

Supplies: $0.70q

Insurance: $9,600

Miscellaneous expense: $5,000 + $0.10q

The company reported the following actual results for June:

Revenue

$132,600

Wages and salaries

$82,400

Supplies

$16,700

Insurance

$11,900

Miscellaneous expense

$7,100

Revenue ($5.30q)

Required:

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

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

8-1020

392.

Mulberry Clinic uses patient-visits as its measure of activity. The clinic bases its budgets

on the following information: Revenue should be $48.70 per patient-visit. Personnel

expenses should be $27,600 per month plus $14.70 per patient-visit. Medical supplies

should be $1,000 per month plus $10.10 per patient-visit. Occupancy expenses should be

$9,500 per month plus $2.40 per patient-visit. Administrative expenses should be $3,800

per month plus $0.10 per patient-visit.

The clinic reported the following actual results for August:

Patient-visits

2,000

Revenue

$96,630

Personnel expenses

$55,310

Medical supplies

$21,540

Occupancy expenses

$14,470

Administrative expenses

$3,960

Required:

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

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

Patient-visits (q)

Revenue ($48.70q)