294) Lochner 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 June.
Variable Element
per Well Serviced
Actual Total
for June
Revenue
$
5,600
$
148,000
Employee salaries and wages
$
40,600
$
1,200
$
73,700
Servicing materials
$
500
$
13,600
Other expenses
$
42,800
$
43,300
–
When the company prepared its planning budget at the beginning of June, it assumed that 24
wells would have been serviced. However, 26 wells were actually serviced during June.
The activity variance for revenue for June would have been closest to:
A) $13,600 U
B) $13,600 F
C) $11,200 F
D) $11,200 U
Flexible Budget
Wells serviced (q)
Revenue ($5,600q)
145,600
134,400
$
11,200
F
–
295) Lochner 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 June.
Variable Element
per Well Serviced
Actual Total
for June
Revenue
$
5,600
$
148,000
Employee salaries and wages
$
40,600
$
1,200
$
73,700
Servicing materials
$
500
$
13,600
Other expenses
$
42,800
$
43,300
–
When the company prepared its planning budget at the beginning of June, it assumed that 24
wells would have been serviced. However, 26 wells were actually serviced during June.
The activity variance for “Employee salaries and wages” for June would have been closest to:
A) $2,400 F
B) $4,300 U
C) $4,300 F
D) $2,400 U
Wells serviced (q)
($40,600 + $1,200q)
–
296) Lochner 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 June.
Variable Element
per Well Serviced
Actual Total
for June
Revenue
$
5,600
$
148,000
Employee salaries and wages
$
40,600
$
1,200
$
73,700
Servicing materials
$
500
$
13,600
Other expenses
$
42,800
$
43,300
–
When the company prepared its planning budget at the beginning of June, it assumed that 24
wells would have been serviced. However, 26 wells were actually serviced during June.
The revenue variance in the Revenue and Spending Variances column of a report comparing
actual results to the flexible budget for June would have been closest to:
A) $2,400 U
B) $13,600 U
C) $2,400 F
D) $13,600 F
Results
Budget
Wells serviced (q)
Revenue ($5,600q)
$
148,000
$
145,600
F
–
297) Lochner 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 June.
Variable Element
per Well Serviced
Actual Total
for June
Revenue
$
5,600
$
148,000
Employee salaries and wages
$
40,600
$
1,200
$
73,700
Servicing materials
$
500
$
13,600
Other expenses
$
42,800
$
43,300
–
When the company prepared its planning budget at the beginning of June, it assumed that 24
wells would have been serviced. However, 26 wells were actually serviced during June.
The spending variance for “Employee salaries and wages” for June would have been closest to:
A) $1,900 U
B) $4,300 U
C) $4,300 F
D) $1,900 F
Wells serviced (q)
($40,600 + $1,200q)
$
73,700
$
71,800
$
1,900
U
–
298) Skoff 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
March.
Variable Element
per Container
Refurbished
Actual Total
for March
Revenue
$
4,000
$
130,000
Employee salaries and wages
$
42,700
$
1,000
$
75,600
Refurbishing materials
$
600
$
18,800
Other expenses
$
37,900
$
38,400
–
When the company prepared its planning budget at the beginning of March, it assumed that 35
containers would have been refurbished. However, 32 containers were actually refurbished
during March.
The activity variance for “Refurbishing materials” for March would have been closest to:
A) $1,800 F
B) $2,200 U
C) $1,800 U
D) $2,200 F
Variances
Containers refurbished (q)
35
Refurbishing materials ($600q)
$
19,200
$
21,000
$
F
–
299) Skoff 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
March.
Variable Element
per Container
Refurbished
Actual Total
for March
Revenue
$
4,000
$
130,000
Employee salaries and wages
$
42,700
$
1,000
$
75,600
Refurbishing materials
$
600
$
18,800
Other expenses
$
37,900
$
38,400
–
When the company prepared its planning budget at the beginning of March, it assumed that 35
containers would have been refurbished. However, 32 containers were actually refurbished
during March.
The activity variance for “Other expenses” for March would have been closest to:
A) $0
B) $4,100 U
C) $500 F
D) $500 U
Containers refurbished (q)
Other expenses ($37,900)
$
37,900
$
37,900
$
0
–
300) Skoff 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
March.
Variable Element
per Container
Refurbished
Actual Total
for March
Revenue
$
4,000
$
130,000
Employee salaries and wages
$
42,700
$
1,000
$
75,600
Refurbishing materials
$
600
$
18,800
Other expenses
$
37,900
$
38,400
–
When the company prepared its planning budget at the beginning of March, it assumed that 35
containers would have been refurbished. However, 32 containers were actually refurbished
during March.
The spending variance for “Refurbishing materials” for March would have been closest to:
A) $2,200 F
B) $400 F
C) $400 U
D) $2,200 U
Variances
Containers refurbished (q)
Refurbishing materials ($600q)
$
18,800
$
19,200
$
400
F
–
301) Skoff 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
March.
Variable Element
per Container
Refurbished
Actual Total
for March
Revenue
$
4,000
$
130,000
Employee salaries and wages
$
42,700
$
1,000
$
75,600
Refurbishing materials
$
600
$
18,800
Other expenses
$
37,900
$
38,400
–
When the company prepared its planning budget at the beginning of March, it assumed that 35
containers would have been refurbished. However, 32 containers were actually refurbished
during March.
The spending variance for “Other expenses” for March would have been closest to:
A) $500 F
B) $3,600 F
C) $500 U
D) $3,600 U
Variances
Containers refurbished (q)
Other expenses ($37,900)
$
38,400
$
37,900
$
500
U
–
302) Prestridge Corporation is a service company that measures its output by the number of
customers served. The company has provided the following fixed and variable cost estimates that
it uses for budgeting purposes and the actual results of operations for August.
Variable Element
per Customer
Served
Actual Total
for August
Revenue
$
4,100
$
120,500
Employee salaries and wages
$
41,500
$
1,000
$
71,200
Travel expenses
$
500
$
14,800
Other expenses
$
38,900
$
38,400
–
When the company prepared its planning budget at the beginning of August, it assumed that 31
customers would have been served. However, 29 customers were actually served during August.
The spending variance for total expenses for August would have been closest to:
A) $2,500 U
B) $2,500 F
C) $500 F
D) $500 U
Results
Budget
Customers served (q)
Expenses:
Employee salaries and wages
($41,500 + $1,000q)
Travel expenses ($500q)
14,800
U
Other expenses ($38,900)
38,400
F
Total expenses
$
124,400
$
123,900
$
U
–
303) Prestridge Corporation is a service company that measures its output by the number of
customers served. The company has provided the following fixed and variable cost estimates that
it uses for budgeting purposes and the actual results of operations for August.
Variable Element
per Customer
Served
Actual Total
for August
Revenue
$
4,100
$
120,500
Employee salaries and wages
$
41,500
$
1,000
$
71,200
Travel expenses
$
500
$
14,800
Other expenses
$
38,900
$
38,400
When the company prepared its planning budget at the beginning of August, it assumed that 31
customers would have been served. However, 29 customers were actually served during August.
The variance for net operating income in the Revenue and Spending Variances column of a
report comparing actual results to the flexible budget for August would have been closest to:
A) $4,100 U
B) $4,100 F
C) $1,100 U
D) $1,100 F
Customers served (q)
Revenue ($4,100q)
$
120,500
$
118,900
1,600
F
Expenses:
Employee salaries and
wages ($41,500 + $1,000q)
700
U
Travel expenses ($500q)
300
U
Other expenses ($38,900)
500
F
Total expenses
124,400
123,900
500
U
Net operating income
$
)
$
)
1,100
F
304) Prestridge Corporation is a service company that measures its output by the number of
customers served. The company has provided the following fixed and variable cost estimates that
it uses for budgeting purposes and the actual results of operations for August.
Variable Element
per Customer
Served
Actual Total
for August
Revenue
$
4,100
$
120,500
Employee salaries and wages
$
41,500
$
1,000
$
71,200
Travel expenses
$
500
$
14,800
Other expenses
$
38,900
$
38,400
When the company prepared its planning budget at the beginning of August, it assumed that 31
customers would have been served. However, 29 customers were actually served during August.
The activity variance for total expenses for August would have been closest to:
A) $3,000 U
B) $2,500 F
C) $3,000 F
D) $2,500 U
Budget
Budget
Customers served (q)
Expenses:
Employee salaries and wages
($41,500 + $1,000q)
2,000
Travel expenses ($500q)
1,000
F
Other expenses ($38,900)
Total expenses
$
123,900
$
126,900
3,000
F
–
305) Prestridge Corporation is a service company that measures its output by the number of
customers served. The company has provided the following fixed and variable cost estimates that
it uses for budgeting purposes and the actual results of operations for August.
Variable Element
per Customer
Served
Actual Total
for August
Revenue
$
4,100
$
120,500
Employee salaries and wages
$
41,500
$
1,000
$
71,200
Travel expenses
$
500
$
14,800
Other expenses
$
38,900
$
38,400
When the company prepared its planning budget at the beginning of August, it assumed that 31
customers would have been served. However, 29 customers were actually served during August.
The activity variance for net operating income for August would have been closest to:
A) $5,200 F
B) $4,100 U
C) $5,200 U
D) $4,100 F
Customers served (q)
Revenue ($4,100q)
$
118,900
$
127,100
8,200
U
Expenses:
Employee salaries and
wages ($41,500 + $1,000q)
Travel expenses ($500q)
14,500
1,000
F
Other expenses ($38,900)
38,900
Total expenses
123,900
126,900
3,000
F
Net operating income
$
(5,000
)
$
5,200
U
306) Moncrief Corporation bases its budgets on machine-hours. The company’s static planning
budget for July appears below:
Budgeted number of machine-hours
1,000
Supplies (@ $8.60 per machine-hour)
$
8,600
Power (@ $8.80 per machine-hour)
8,800
Salaries
11,300
Equipment depreciation
9,900
Total
$
38,600
Actual results for the month were:
Actual number of machine-hours
1,200
Supplies
$
10,290
Power
$
10,860
Salaries
$
11,690
Equipment depreciation
$
9,990
The spending variance for supplies costs in the flexible budget performance report for the month
should be:
A) $30 F
B) $1,690 F
C) $1,690 U
D) $30 U
Actual results
$
10,290
Flexible budget ($8.60 × 1,200)
10,320
Spending variance
$
307) Moncrief Corporation bases its budgets on machine-hours. The company’s static planning
budget for July appears below:
Budgeted number of machine-hours
1,000
Supplies (@ $8.60 per machine-hour)
$
8,600
Power (@ $8.80 per machine-hour)
8,800
Salaries
11,300
Equipment depreciation
9,900
Total
$
38,600
Actual results for the month were:
Actual number of machine-hours
1,200
Supplies
$
10,290
Power
$
10,860
Salaries
$
11,690
Equipment depreciation
$
9,990
The spending variance for power costs in the flexible budget performance report for the month
should be:
A) $2,060 F
B) $2,060 U
C) $300 F
D) $300 U
Actual results
$
10,860
Flexible budget ($8.80 × 1,200)
10,560
Spending variance
$
–
308) Moncrief Corporation bases its budgets on machine-hours. The company’s static planning
budget for July appears below:
Budgeted number of machine-hours
1,000
Supplies (@ $8.60 per machine-hour)
$
8,600
Power (@ $8.80 per machine-hour)
8,800
Salaries
11,300
Equipment depreciation
9,900
Total
$
38,600
Actual results for the month were:
Actual number of machine-hours
1,200
Supplies
$
10,290
Power
$
10,860
Salaries
$
11,690
Equipment depreciation
$
9,990
The spending variance for equipment depreciation in the flexible budget performance report for
the month should be:
A) $1,890 U
B) $90 F
C) $90 U
D) $1,890 F
Actual results
$
9,990
Flexible budget
9,900
Spending variance
$
–
309) Brong 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
March.
Variable Element
per Container
Refurbished
Actual Total
for March
Revenue
$
5,900
$
108,300
Employee salaries and wages
$
49,500
$
900
$
66,000
Refurbishing materials
$
500
$
9,500
Other expenses
$
40,300
$
39,800
–
When the company prepared its planning budget at the beginning of March, it assumed that 22
containers would have been refurbished. However, 18 containers were actually refurbished
during March.
The revenue variance in the Revenue and Spending Variances column of a report comparing
actual results to the flexible budget for March would have been closest to:
A) $21,500 U
B) $2,100 U
C) $21,500 F
D) $2,100 F
Results
Budget
Variances
Containers refurbished (q)
Revenue ($5,900q)
$
108,300
$
106,200
$
2,100
F
–
310) Brong 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
March.
Variable Element
per Container
Refurbished
Actual Total
for March
Revenue
$
5,900
$
108,300
Employee salaries and wages
$
49,500
$
900
$
66,000
Refurbishing materials
$
500
$
9,500
Other expenses
$
40,300
$
39,800
–
When the company prepared its planning budget at the beginning of March, it assumed that 22
containers would have been refurbished. However, 18 containers were actually refurbished
during March.
The spending variance for “Employee salaries and wages” for March would have been closest to:
A) $3,300 U
B) $3,300 F
C) $300 U
D) $300 F
Containers refurbished (q)
Employee salaries and wages
($49,500 + $900q)
$
66,000
$
65,700
$
300
U
–
311) Brong 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
March.
Variable Element
per Container
Refurbished
Actual Total
for March
Revenue
$
5,900
$
108,300
Employee salaries and wages
$
49,500
$
900
$
66,000
Refurbishing materials
$
500
$
9,500
Other expenses
$
40,300
$
39,800
–
When the company prepared its planning budget at the beginning of March, it assumed that 22
containers would have been refurbished. However, 18 containers were actually refurbished
during March.
The spending variance for “Refurbishing materials” for March would have been closest to:
A) $1,500 F
B) $500 F
C) $1,500 U
D) $500 U
Results
Variances
Containers refurbished (q)
Refurbishing materials ($500q)
$
9,500
$
9,000
500
U
–
312) Brong 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
March.
Variable Element
per Container
Refurbished
Actual Total
for March
Revenue
$
5,900
$
108,300
Employee salaries and wages
$
49,500
$
900
$
66,000
Refurbishing materials
$
500
$
9,500
Other expenses
$
40,300
$
39,800
–
When the company prepared its planning budget at the beginning of March, it assumed that 22
containers would have been refurbished. However, 18 containers were actually refurbished
during March.
The spending variance for “Other expenses” for March would have been closest to:
A) $500 U
B) $8,844 U
C) $8,844 F
D) $500 F
Variances
Containers refurbished (q)
Other expenses ($40,300)
$
39,800
$
40,300
$
500
F
–