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122) Kekiwi Corporation manufactures and sells a single product. The company uses units as the
measure of activity in its budgets and performance reports. During January, the company
budgeted for 6,900 units, but its actual level of activity was 6,910 units. The company has
provided the following data concerning the formulas used in its budgeting and its actual results
for January:
Data used in budgeting:
Fixed Element
per Month
Variable element
per unit
Revenue
-
$
39.30
Direct labor
$
0
$
3.10
Direct materials
0
18.90
Manufacturing overhead
45,900
1.70
Selling and administrative expenses
27,000
0.30
Total expenses
$
72,900
$
24.00
Actual results for January:
Revenue
$
281,473
Direct labor
$
20,591
Direct materials
$
134,889
Manufacturing overhead
$
57,087
Selling and administrative expenses
$
28,063
The manufacturing overhead in the flexible budget for January would be closest to:
A) $57,004
B) $57,647
C) $57,630
D) $57,170
102
123) Kekiwi Corporation manufactures and sells a single product. The company uses units as the
measure of activity in its budgets and performance reports. During January, the company
budgeted for 6,900 units, but its actual level of activity was 6,910 units. The company has
provided the following data concerning the formulas used in its budgeting and its actual results
for January:
Data used in budgeting:
Fixed Element
per Month
Variable element
per unit
Revenue
-
$
39.30
Direct labor
$
0
$
3.10
Direct materials
0
18.90
Manufacturing overhead
45,900
1.70
Selling and administrative expenses
27,000
0.30
Total expenses
$
72,900
$
24.00
Actual results for January:
Revenue
$
281,473
Direct labor
$
20,591
Direct materials
$
134,889
Manufacturing overhead
$
57,087
Selling and administrative expenses
$
28,063
The net operating income in the flexible budget for January would be closest to:
A) $32,823
B) $40,902
C) $32,670
D) $40,784
124) The amount shown for revenue in the planning budget for November would have been
closest to:
A) $170,500
B) $148,500
C) $149,981
D) $172,200
125) The amount shown for "Employee salaries and wages" in the planning budget for
November would have been closest to:
A) $88,800
B) $93,400
C) $94,000
D) $81,348
126) The amount shown for "Servicing materials" in the planning budget for November would
have been closest to:
A) $19,000
B) $16,200
C) $16,548
D) $18,600
127) The amount shown for "Other expenses" in the planning budget for November would have
been closest to:
A) $34,100
B) $29,439
C) $33,800
D) $34,400
128) The amount shown for total expenses in the planning budget for November would have
been closest to:
A) $127,335
B) $146,200
C) $147,000
D) $139,400
129) The amount shown for net operating income in the planning budget for November would
have been closest to:
A) $26,000
B) $9,100
C) $23,500
D) $22,645
130) Mandalay Hotel bases its budgets on guest-days. The hotel's static budget for August
appears below:
Budgeted number of guest-days
4,300
Budgeted variable costs:
Supplies (@$9.60 per guest-day)
$
41,280
Laundry (@$9.40 per guest-day)
40,420
Total variable cost
81,700
Budgeted fixed costs:
Wages and salaries
57,190
Occupancy costs
52,030
Total fixed cost
109,220
Total cost
$
190,920
The total variable cost at the activity level of 5,000 guest-days per month should be:
A) $127,000
B) $109,220
C) $95,000
D) $81,700
131) Mandalay Hotel bases its budgets on guest-days. The hotel's static budget for August
appears below:
Budgeted number of guest-days
4,300
Budgeted variable costs:
Supplies (@$9.60 per guest-day)
$
41,280
Laundry (@$9.40 per guest-day)
40,420
Total variable cost
81,700
Budgeted fixed costs:
Wages and salaries
57,190
Occupancy costs
52,030
Total fixed cost
109,220
Total cost
$
190,920
The total fixed cost at the activity level of 5,500 guest-days per month should be:
A) $139,700
B) $190,920
C) $244,200
D) $109,220
132) Mandalay Hotel bases its budgets on guest-days. The hotel's static budget for August
appears below:
Budgeted number of guest-days
4,300
Budgeted variable costs:
Supplies (@$9.60 per guest-day)
$
41,280
Laundry (@$9.40 per guest-day)
40,420
Total variable cost
81,700
Budgeted fixed costs:
Wages and salaries
57,190
Occupancy costs
52,030
Total fixed cost
109,220
Total cost
$
190,920
The total cost at the activity level of 5,200 guest-days per month should be:
A) $208,020
B) $230,880
C) $209,940
D) $190,920
Benjamin 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.
Fixed Element
per Month
Variable
Element per
Container
Refurbished
Revenue
$
5,400
Employee salaries and wages
$
58,300
$
1,000
Refurbishing materials
$
700
Other expenses
$
31,200
When the company prepared its planning budget at the beginning of March, it assumed that 26
containers would have been refurbished. However, 23 containers were actually refurbished
during March.
133) The amount shown for revenue in the planning budget for March would have been closest
to:
A) $126,000
B) $140,400
C) $142,435
D) $124,200
134) The amount shown for "Employee salaries and wages" in the planning budget for March
would have been closest to:
A) $84,300
B) $89,757
C) $79,400
D) $81,300
135) The amount shown for "Refurbishing materials" in the planning budget for March would
have been closest to:
A) $16,700
B) $18,200
C) $18,878
D) $16,100
136) The amount shown for "Other expenses" in the planning budget for March would have been
closest to:
A) $30,600
B) $31,200
C) $34,591
D) $30,900
137) The amount shown for total expenses in the planning budget for March would have been
closest to:
A) $126,700
B) $143,226
C) $128,600
D) $133,700
138) The amount shown for net operating income in the planning budget for March would have
been closest to:
A) ($700)
B) ($791)
C) $6,700
D) ($4,400)
Prowse 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.
Fixed Element
per Month
Variable
Element per
Well Serviced
Revenue
$
4,000
Employee salaries and wages
$
43,800
$
1,000
Servicing materials
$
600
Other expenses
$
38,200
A total of 42 wells were actually serviced during October.
139) The revenue in the company's flexible budget for October would have been closest to:
A) $148,000
B) $150,114
C) $168,000
D) $170,400
140) The "Employee salaries and wages" in the flexible budget for October would have been
closest to:
A) $85,800
B) $84,000
C) $74,000
D) $80,800
141) The "Servicing materials" in the flexible budget for October would have been closest to:
A) $25,200
B) $24,900
C) $22,200
D) $21,936
142) The "Other expenses" in the flexible budget for October would have been closest to:
A) $34,093
B) $38,200
C) $43,930
D) $38,700
143) The total expenses in the flexible budget for October would have been closest to:
A) $149,200
B) $141,200
C) $130,029
D) $147,600
144) Grohs Kennel uses tenant-days as its measure of activity; an animal housed in the kennel
for one day is counted as one tenant-day. During December, the kennel budgeted for 2,500
tenant-days, but its actual level of activity was 2,530 tenant-days. The kennel has provided the
following data concerning the formulas to be used in its budgeting:
Fixed Element
per Month
Variable element
per tenant-day
Revenue
-
$
33.00
Wages and salaries
$
3,800
$
7.90
Food and supplies
1,000
11.60
Facility expenses
8,600
2.20
Administrative expenses
6,200
0.20
Total expenses
$
19,600
$
21.90
The administrative expenses in the planning budget for December would be closest to:
A) $6,893
B) $6,700
C) $6,976
D) $6,706
145) Grohs Kennel uses tenant-days as its measure of activity; an animal housed in the kennel
for one day is counted as one tenant-day. During December, the kennel budgeted for 2,500
tenant-days, but its actual level of activity was 2,530 tenant-days. The kennel has provided the
following data concerning the formulas to be used in its budgeting:
Fixed Element
per Month
Variable element
per tenant-day
Revenue
-
$
33.00
Wages and salaries
$
3,800
$
7.90
Food and supplies
1,000
11.60
Facility expenses
8,600
2.20
Administrative expenses
6,200
0.20
Total expenses
$
19,600
$
21.90
The net operating income in the planning budget for December would be closest to:
A) $8,150
B) $11,914
C) $8,483
D) $11,633
