Faculty wages
$
0
$
0
$
2,600
Course supplies
$
0
$
38
$
23
Administrative expenses
$
33,200
$
15
$
24
–
In August, the school budgeted for 1,590 students and 110 courses. The school’s income
statement showing the actual results for the month appears below:
Boan Tech
Income Statement
For the Month Ended August 31
Actual students
1,290
Actual courses
105
Revenue
$
390,290
Expenses:
Faculty wages
277,890
Course supplies
52,175
Administrative expenses
54,960
Total expense
385,025
Net operating income
$
5,265
–
Required:
Prepare a report showing the school’s activity variances for August. Label each variance as
favorable (F) or unfavorable (U).
Variances
Students (q1)
1,290
1,590
Courses (q2)
105
Revenue ($297q1)
$
383,130
$
89,100
U
$
472,230
Expenses:
Faculty wages ($2,600q2)
273,000
13,000
F
286,000
Course supplies ($38q1 + $23q2)
51,435
11,515
F
62,950
$15q1 + $24q2)
Net operating income
U
–
408) Smith 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
February.
Fixed Element
per Month
Variable Element
per Container
Refurbished
Actual Total for
February
Revenue
$4,900
$129,900
Employee salaries and wages
$58,400
$1,000
$84,200
Refurbishing materials
$500
$13,200
Other expenses
$39,100
$38,900
When the company prepared its planning budget at the beginning of February, it assumed that 31
containers would have been refurbished. However, 26 containers were actually refurbished
during February.
Required:
Prepare a report showing the company’s revenue and spending variances for February. Indicate in
each case whether the variance is favorable (F) or unfavorable (U).
Spending
Containers refurbished (q)
Revenue ($4,900q)
$127,400
F
Expenses:
($58,400 + $1,000q)
F
Refurbishing materials ($500q)
Other expenses ($39,100)
F
Net operating income
$(9,100)
409) Thorman 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.
Fixed Element
per Month
Variable Element
per Customer
Served
Actual Total
for August
Revenue
$4,400
$174,100
Employee salaries and wages
$44,400
$1,300
$93,600
Travel expenses
$700
$27,700
Other expenses
$38,300
$38,100
When the company prepared its planning budget at the beginning of August, it assumed that 35
customers would have been served. However, 39 customers were actually served during August.
Required:
Prepare a report showing the company’s revenue and spending variances for August. Indicate in
each case whether the variance is favorable (F) or unfavorable (U).
Spending
Customers served (q)
Revenue ($4,400q)
Expenses:
($44,400 + $1,300q)
Travel expenses ($700q)
Other expenses ($38,300)
Total expenses
159,400
160,700
Net operating income
$14,700
$10,900
410) Cryan Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company
bases its budgets on two measures of activity (i.e., cost drivers), namely guests and jeeps. One
vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide. The company
uses the following data in its budgeting:
Fixed element
per month
Variable element
per guest
Variable element
per jeep
Revenue
$
0
$
117
$
0
Tour guide wages
$
0
$
0
$
171
Vehicle expenses
$
4,600
$
5
$
60
Administrative expenses
$
1,100
$
4
$
0
–
In May, the company budgeted for 447 guests and 152 jeeps. The company’s income statement
showing the actual results for the month appears below:
Cryan Jeep Tours
Income Statement
For the Month Ended May 31
Actual guests
462
Actual jeeps
147
Revenue
$
53,854
Expenses:
Tour guide wages
25,157
Vehicle expenses
15,640
Administrative expenses
2,888
Total expense
43,685
Net operating income
$
10,169
–
Required:
Prepare a report showing the company’s revenue and spending variances for May. Label each
variance as favorable (F) or unfavorable (U).
419
Spending
Guests (q1)
Revenue ($117q1)
$
200
U
$
54,054
Expenses:
Tour guide wages ($171q2)
20
U
25,137
$60q2)
$4q1)
Total expense
130
F
43,815
Net operating income
$
70
U
$
10,239
–
411) Hislop Tech is a for-profit vocational school. The school bases its budgets on two measures
of activity (i.e., cost drivers), namely student and course. The school uses the following data in
its budgeting:
Fixed element
per month
Variable
element
per student
Variable element
per course
Revenue
$
0
$
212
$
0
Faculty wages
$
0
$
0
$
2,100
Course supplies
$
0
$
37
$
45
Administrative expenses
$
28,800
$
6
$
26
–
In June, the school budgeted for 1,910 students and 111 courses. The school’s income statement
showing the actual results for the month appears below:
Hislop Tech
Income Statement
For the Month Ended June 30
Actual students
1,810
Actual courses
106
Revenue
$
387,740
Expenses:
Faculty wages
218,200
Course supplies
72,360
Administrative expenses
41,716
Total expense
332,276
Net operating income
$
55,464
–
Required:
Prepare a report showing the school’s revenue and spending variances for June. Label each
variance as favorable (F) or unfavorable (U).
Variances
Students (q1)
Courses (q2)
Revenue ($212q1)
$
387,740
$
4,020
F
$
383,720
Expenses:
Faculty wages ($2,100q2)
218,200
4,400
F
222,600
Course supplies ($37q1 + $45q2)
U
$6q1 + $26q2)
Total expense
332,276
4,480
F
336,756
Net operating income
$
$
8,500
F
$
–
412) Klingshirn 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 December.
Fixed Element
per Month
Variable Element
per Customer
Served
Actual Total
for December
Revenue
$5,400
$126,800
Employee salaries and wages
$44,500
$1,300
$73,400
Travel expenses
$600
$13,400
Other expenses
$41,900
$42,700
When the company prepared its planning budget at the beginning of December, it assumed that
25 customers would have been served. However, 23 customers were actually served during
December.
Required:
Prepare a performance report showing the company’s activity and revenue and spending
variances for December. Indicate in each case whether the variance is favorable (F) or
unfavorable (U).
Planning
Customers served (q)
Revenue ($5,400q)
Expenses:
Employee salaries and wages ($44,500 + $1,300q)
Travel expenses ($600q)
Other expenses ($41,900)
Total expenses
130,100
Net operating income
413) Carlino 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 April.
Fixed Element
per Month
Variable Element
per Well
Serviced
Actual Total
for April
Revenue
$4,800
$126,900
Employee salaries and wages
$43,000
$1,100
$73,600
Servicing materials
$500
$13,600
Other expenses
$31,600
$31,300
When the company prepared its planning budget at the beginning of April, it assumed that 24
wells would have been serviced. However, 26 wells were actually serviced during April.
Required:
Prepare a performance report showing the company’s activity and revenue and spending
variances for April. Indicate in each case whether the variance is favorable (F) or unfavorable
(U).
Planning
Wells serviced (q)
Revenue ($4,800q)
Expenses:
Employee salaries and wages ($43,000 + $1,100q)
Servicing materials ($500q)
Other expenses ($31,600)
Total expenses
116,200
Net operating income
414) Rizzio Tech is a for-profit vocational school. The school bases its budgets on two measures
of activity (i.e., cost drivers), namely student and course. The school uses the following data in
its budgeting:
Fixed element
per month
Variable
element
per student
Variable element
per course
Revenue
$
0
$
416
$
0
Faculty wages
$
0
$
0
$
2,300
Course supplies
$
0
$
77
$
25
Administrative expenses
$
57,900
$
16
$
27
–
In September, the school budgeted for 1,820 students and 173 courses. The actual activity for the
month was 2,020 students and 178 courses.
Required:
Prepare the school’s planning budget for September.
Budgeted students (q1)
1,820
Budgeted courses (q2)
Revenue ($416q1)
$
757,120
Expenses:
Faculty wages ($2,300q2)
397,900
Course supplies ($77q1 + $25q2)
144,465
Administrative expenses ($57,900 + $16q1 + $27q2)
91,691
Total expense
634,056
Net operating income
$
123,064
–
415) Difabio Tech is a for-profit vocational school. The school bases its budgets on two
measures of activity (i.e., cost drivers), namely student and course. The school uses the following
data in its budgeting:
Fixed element
per month
Variable
element
per student
Variable element
per course
Revenue
$
0
$
421
$
0
Faculty wages
$
0
$
0
$
2,800
Course supplies
$
0
$
62
$
36
Administrative expenses
$
31,600
$
21
$
32
–
In June, the school budgeted for 1,070 students and 90 courses. The actual activity for the month
was 1,370 students and 95 courses.
Required:
Prepare the school’s flexible budget for the actual level of activity in June.
Actual students (q1)
1,370
Revenue ($421q1)
$
Expenses:
Faculty wages ($2,800q2)
Course supplies ($62q1 + $36q2)
Administrative expenses ($31,600 + $21q1 + $32q2)
Total expense
Net operating income
$
–
416) McInerney Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The
company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and
jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide.
The company uses the following data in its budgeting:
Fixed element
per month
Variable
element
per guest
Variable
element per
jeep
Revenue
$
0
$
91
$
0
Tour guide wages
$
0
$
0
$
118
Vehicle expenses
$
3,900
$
8
$
61
Administrative expenses
$
2,600
$
1
$
0
–
In October, the company budgeted for 325 guests and 91 jeeps. The actual
activity for the month was 340 guests and 96 jeeps.
Required:
Prepare the company’s flexible budget for the actual level of activity in October.
Actual guests (q1)
340
Revenue ($91q1)
30,940
Expenses:
Tour guide wages ($118q2)
11,328
Vehicle expenses ($3,900 + $8q1 + $61q2)
12,476
Administrative expenses ($2,600 + $1q1)
Total expense
26,744
Net operating income
–
417) Billafuerte Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The
company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and
jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide.
The company uses the following data in its budgeting:
Fixed element
per month
Variable
element
per guest
Variable
element per
jeep
Revenue
$
0
$
139
$
0
Tour guide wages
$
0
$
0
$
176
Vehicle expenses
$
3,100
$
6
$
42
Administrative expenses
$
1,700
$
1
$
0
–
In July, the company budgeted for 496 guests and 233 jeeps. The actual activity for the month
was 481 guests and 238 jeeps.
Required:
Prepare the company’s planning budget for July.
Budgeted guests (q1)
496
