381
382
383) Arrasmith Corporation uses customers served as its measure of activity. During February, the
company budgeted for 35,000 customers, but actually served 34,000 customers. The company
uses the following revenue and cost formulas in its budgeting, where q is the number of customers
served:
Revenue: $3.50q
Wages and salaries: $33,200 + $1.10q
Supplies: $0.50q
Insurance: $10,400
Miscellaneous expense: $6,400 + $0.30q
The company reported the following actual results for February:
Revenue
$
119,800
Wages and salaries
$
68,000
Supplies
$
14,400
Insurance
$
10,400
Miscellaneous expense
$
17,700
–
Required:
Prepare the company’s flexible budget performance report for February. Label each variance as
favorable (F) or unfavorable (U).
384) Wagster Urban Diner is a charity supported by donations that provides free meals to the
homeless. The diner’s budget for November was based on 2,400 meals. The diner’s director has
provided the following cost data to use in the budget: groceries, $2.05 per meal; kitchen
operations, $4,500 per month plus $1.75 per meal; administrative expenses, $3,500 per month plus
$0.20 per meal; and fundraising expenses, $1,700 per month. The director has also provided the
diner’s statement of actual expenses for the month:
Wagster Urban Diner
Statement of Expenses
For the Month Ended November 30
Actual meals
2,700
Groceries
$
5,575
Kitchen operations
9,015
Administrative expenses
3,900
Fundraising expenses
1,750
Total expense
$
20,240
–
Required:
Prepare a flexible budget performance report showing both the activity variances and the spending
variances for each of the expenses and for total expenses for November. Label each variance as
favorable (F) or unfavorable (U).
385
385) Lasserre Clinic uses patient-visits as its measure of activity. During November, the clinic
budgeted for 2,800 patient-visits, but its actual level of activity was 3,000 patient-visits. The clinic
uses the following revenue and cost formulas in its budgeting, where q is the number of
patient-visits:
Revenue: $50.40q
Personnel expenses: $36,200 + $15.60q
Medical supplies: $1,500 + $8.80q
Occupancy expenses: $8,700 + $2.80q
Administrative expenses: $4,300 + $0.40q
The clinic reported the following actual results for November:
Revenue
$
153,570
Personnel expenses
$
80,370
Medical supplies
$
27,430
Occupancy expenses
$
17,620
Administrative expenses
$
5,670
–
Required:
Prepare the clinic’s flexible budget performance report for November. Label each variance as
favorable (F) or unfavorable (U).
Variances
3,000
$
153,570
$
2,370
F
$
151,200
$
10,080
F
Expenses:
80,370
2,630
F
U
27,430
F
U
17,620
U
U
5,670
U
U
Total expense
131,090
2,410
F
133,500
U
387
–
386) Chaudhuri Memorial Diner is a charity supported by donations that provides free meals to the
homeless. The diner’s budget for April was based on 2,700 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
$
3.50
Kitchen operations
$
5,900
$
1.55
Administrative expenses
$
3,000
$
0.75
Fundraising expenses
$
1,500
$
0.00
–
The director has also provided the diner’s statement of actual expenses for the month:
Chaudhuri Memorial Diner
Statement of Expenses
For the Month Ended April 30
Actual meals
2,600
Groceries
$
9,340
Kitchen operations
10,300
Administrative expenses
4,890
Fundraising expenses
1,540
Total expense
$
26,070
–
Required:
388
Prepare a flexible budget performance report showing both the activity variances and the spending
variances for each of the expenses and for total expenses for April. Label each variance as
favorable (F) or unfavorable (U).
387) Ocean Corporation uses customers served as its measure of activity. During June, the
company budgeted for 21,000 customers, but actually served 19,000 customers. The company
bases its budgets on the following information: Revenue should be $5.00 per customer served.
Wages and salaries should be $24,900 per month plus $1.80 per customer served. Supplies should
be $0.90 per customer served. Insurance should be $6,500 per month. Miscellaneous expenses
should be $3,500 per month plus $0.40 per customer served. The company reported the following
actual results for June:
Revenue
$
96,400
Wages and salaries
$
59,600
Supplies
$
18,300
Insurance
$
6,200
Miscellaneous expense
$
13,600
–
Required:
Prepare the company’s flexible budget performance report for June. Label each variance as
favorable (F) or unfavorable (U).
Results
Budget
Patient-visits (q)
19,000
Revenue ($5.00q)
1,400
F
95,000
10,000
U
Expenses:
U
59,100
F
Supplies ($0.90q)
1,200
U
17,100
F
($6,500)
F
F
+ $0.40q)
2,500
U
11,100
F
Total expense
3,900
U
93,800
F
–
388) Arrison Corporation uses customers served as its measure of activity. During July, the
company budgeted for 34,000 customers, but actually served 33,000 customers. The company has
provided the following data concerning the formulas used in its budgeting and its actual results for
July:
Data used in budgeting:
Fixed element
per month
Variable element per
customer
Revenue
–
$
3.50
Wages and salaries
$
31,200
$
1.20
Supplies
$
0
$
0.60
Insurance
$
10,000
$
0.00
Miscellaneous expense
$
6,400
$
0.20
–
Actual results for July:
Revenue
$
115,100
Wages and salaries
$
69,300
Supplies
$
22,700
Insurance
$
9,700
Miscellaneous expense
$
13,900
–
Required:
Prepare the company’s flexible budget performance report for July. Label each variance as
favorable (F) or unfavorable (U).
391
$
115,100
U
115,500
3,500
U
Expenses:
+ $1.20q)
1,500
F
1,200
F
2,900
U
F
($10,000)
F
U
F
Total expense
115,600
2,000
U
113,600
2,000
F
–
389) Bickel 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 November:
Bickel Corporation
Comparison of Actual Results to Planning Budget
For the Month Ended November 30
Actual
Results
Planning
Budget
Variances
Customers served
24,000
25,000
Revenue ($3.60q)
$
85,700
$
90,000
$
4,300
U
Expenses:
Wages and salaries ($22,200 + $1.20q)
48,900
52,200
3,300
F
Supplies ($0.50q)
13,000
12,500
500
U
Insurance ($5,700)
5,600
5,700
100
F
Miscellaneous expense ($4,500 + $0.40q)
11,900
14,500
2,600
F
Total expense
79,400
84,900
5,500
F
Net operating income
$
6,300
$
5,100
$
1,200
F
–
Required:
Prepare the company’s flexible budget performance report for November. Label each variance as
favorable (F) or unfavorable (U).
Customers served (q)
Revenue ($3.60q)
Expenses:
$1.20q)
+ $0.40q)
Total expense
Net operating income
Patient-visits (q)
Revenue ($48.50q)
Expenses:
393
5,700
5,700
+ $0.40q)
Total expense
Net operating income
390) Mellenthin 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 May:
Mellenthin Clinic
Comparison of Actual Results to Planning Budget
For the Month Ended May 31
Actual Results
Planning
Budget
Variances
Patient-visits (q)
3,700
3,600
Revenue ($29.00q)
$
102,370
$
104,400
$
2,030
U
Expenses:
Personnel expenses ($29,400 + $8.30q)
62,870
59,280
3,590
U
Medical supplies ($1,200 + $5.60q)
20,940
21,360
420
F
Occupancy expenses ($6,000 + $0.90q)
8,940
9,240
300
F
Administrative expenses ($3,600 + $0.10q)
4,100
3,960
140
U
Total expense
96,850
93,840
3,010
U
Net operating income
$
5,520
$
10,560
$
5,040
U
–
Required:
Prepare the clinic’s flexible budget performance report for May. Label each variance as favorable
(F) or unfavorable (U).
391) Sincell Corporation uses customers served as its measure of activity. During April, the
company budgeted for 22,000 customers, but actually served 24,000 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: $26,000 + $1.10q
Supplies: $0.70q
Insurance: $7,100
Miscellaneous expense: $3,400 + $0.30q
The company reported the following actual results for April:
Revenue
$
100,500
Wages and salaries
$
52,200
Supplies
$
18,100
Insurance
$
8,100
Miscellaneous expense
$
11,900
–
Required:
Prepare a report showing the company’s revenue and spending variances for April. Label each
variance as favorable (F) or unfavorable (U).
Variances
Customers served (q)
24,000
Revenue ($4.10q)
$
100,500
$
98,400
$
2,100
Expenses:
Wages and salaries ($26,000 + $1.10q)
52,400
Supplies ($0.70q)
16,800
1,300
U
Insurance ($7,100)
1,000
U
Miscellaneous expense ($3,400 + $0.30q)
10,600
1,300
U
Total expense
86,900
3,400
U
Net operating income
$
$
11,500
$
1,300
U
–
392) Shaak Corporation uses customers served as its measure of activity. The company bases its
budgets on the following information: Revenue should be $3.20 per customer served. Wages and
salaries should be $21,000 per month plus $0.80 per customer served. Supplies should be $0.70
per customer served. Insurance should be $5,300 per month. Miscellaneous expenses should be
$3,100 per month plus $0.10 per customer served.
The company reported the following actual results for October:
Customers served
22,000
Revenue
$
73,300
Wages and salaries
$
40,400
Supplies
$
16,100
Insurance
$
5,500
Miscellaneous expense
$
7,400
–
Required:
Prepare a report showing the company’s revenue and spending variances for October. Label each
variance as favorable (F) or unfavorable (U).
Results
Customers served (q)
22,000
22,000
Revenue ($3.20q)
$
73,300
$
70,400
$
F
Expenses:
Wages and salaries ($21,000 + $0.80q)
40,400
38,600
U
Miscellaneous expense ($3,100 + $0.10q)
U
Total expense
69,400
64,600
U
Net operating income
$
$
$
U
–
393) Laizure Clinic uses patient-visits as its measure of activity. The clinic bases its budgets on the
following information: Revenue should be $55.90 per patient-visit. Personnel expenses should be
$35,700 per month plus $15.80 per patient-visit. Medical supplies should be $2,000 per month
plus $11.20 per patient-visit. Occupancy expenses should be $8,400 per month plus $2.00 per
patient-visit. Administrative expenses should be $3,900 per month plus $0.10 per patient-visit.
The clinic reported the following actual results for November:
Patient-visits
2,800
Revenue
$
164,240
Personnel expenses
$
82,320
Medical supplies
$
34,640
Occupancy expenses
$
13,750
Administrative expenses
$
4,150
–
Required:
Prepare a report showing the clinic’s revenue and spending variances for November. Label each
variance as favorable (F) or unfavorable (U).
398
Revenue ($55.90q)
$
164,240
$
156,520
$
Expenses:
$15.80q)
Medical supplies ($2,000 + $11.20q)
U
Occupancy expenses ($8,400 + $2.00q)
250
$0.10q)
Total expense
134,860
131,480
U
Net operating income
$
$
$
–
394) Dilley Clinic uses patient-visits as its measure of activity. During November, the clinic
budgeted for 3,100 patient-visits, but its actual level of activity was 3,500 patient-visits. The clinic
has provided the following data concerning the formulas used in its budgeting and its actual results
for November:
Data used in budgeting:
Fixed element
per month
Variable element per
customer
Revenue
–
$
31.40
Personnel expenses
$
28,000
$
8.50
Medical supplies
$
800
$
5.30
Occupancy expenses
$
7,400
$
0.90
Administrative expenses
$
2,900
$
0.30
–
Actual results for December:
Revenue
$
109,940
Personnel expenses
$
57,830
Medical supplies
$
19,360
399
Occupancy expenses
$
10,110
Administrative expenses
$
3,920
–
Required:
Prepare a report showing the clinic’s revenue and spending variances for November. Label each
variance as favorable (F) or unfavorable (U).
Patient-visits (q)
3,500
Revenue ($31.40q)
$
$
109,900
Expenses:
Personnel expenses ($28,000 + $8.50q)
Medical supplies ($800 + $5.30q)
Occupancy expenses ($7,400 + $0.90q)
$0.30q)
Total expense
Net operating income
$
$
–
395) Nobriga Corporation uses customers served as its measure of activity. During October, the
company budgeted for 29,000 customers, but actually served 33,000 customers. The company has
provided the following data concerning the formulas used in its budgeting and its actual results for
October:
Data used in budgeting:
Fixed element per
Variable element
month
per customer
Revenue
–
$2.90
Wages and salaries
$25,500
$0.80
Supplies
$0
$0.30
Insurance
$6,000
$0.00
Miscellaneous expense
$3,700
$0.40
Actual results for October:
Revenue
$94,500
Wages and salaries
$51,100
Supplies
$12,100
Insurance
$3,600
Miscellaneous expense
$16,900
Required:
Prepare a report showing the company’s revenue and spending variances for October. Label each
variance as favorable (F) or unfavorable (U).
Customers served (q)
Revenue ($2.90q)
Expenses:
Wages and salaries ($25,500 + $0.80q)
Supplies ($0.30q)
Insurance ($6,000)
$0.40q)
Total expense
Net operating income