Chapter 09 Flexible Budgets and Performance Analysis
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208. The net operating income in the flexible budget for March would be closest to:
Hanekamp Corporation manufactures and sells a single product. The company uses units as the
measure of activity in its budgets and performance reports. During August, the company
budgeted for 5,400 units, but its actual level of activity was 5,440 units. The company has
provided the following data concerning the formulas to be used in its budgeting:
Chapter 09 Flexible Budgets and Performance Analysis
209. The direct materials in the flexible budget for August would be closest to:
210. The manufacturing overhead in the flexible budget for August would be closest to:
Chapter 09 Flexible Budgets and Performance Analysis
211. The net operating income in the flexible budget for August would be closest to:
Chapter 09 Flexible Budgets and Performance Analysis
Friou Corporation manufactures and sells a single product. The company uses units as the
measure of activity in its budgets and performance reports. During July, the company budgeted
for 6,300 units, but its actual level of activity was 6,250 units. The company has provided the
following data concerning the formulas used in its budgeting and its actual results for July:
Data used in budgeting:
Actual results for July:
212. The direct labor in the planning budget for July would be closest to:
Chapter 09 Flexible Budgets and Performance Analysis
213. The manufacturing overhead in the flexible budget for July would be closest to:
214. The net operating income in the flexible budget for July would be closest to:
Chapter 09 Flexible Budgets and Performance Analysis
Dukeman Corporation manufactures and sells a single product. The company uses units as the
measure of activity in its budgets and performance reports. During February, the company
budgeted for 7,100 units, but its actual level of activity was 7,060 units. The company has
provided the following data concerning the formulas to be used in its budgeting:
215. The selling and administrative expenses in the planning budget for February would be
closest to:
Chapter 09 Flexible Budgets and Performance Analysis
216. The net operating income in the planning budget for February would be closest to:
217. The direct materials in the flexible budget for February would be closest to:
Chapter 09 Flexible Budgets and Performance Analysis
Rushton Hospital bases its budgets on patient-visits. The hospital’s static planning budget for
May appears below:
Actual results for the month were:
218. The spending variance for supplies costs in the flexible budget performance report for the
month is:
Chapter 09 Flexible Budgets and Performance Analysis
219. The spending variance for laundry costs in the flexible budget performance report for the
month is:
220. The spending variance for occupancy costs in the flexible budget performance report for the
month is:
Chapter 09 Flexible Budgets and Performance Analysis
Lotson Corporation bases its budgets on machine-hours. The company’s static planning budget
for May appears below:
Actual results for the month were:
221. The spending variance for supplies costs in the flexible budget performance report for the
month should be:
Chapter 09 Flexible Budgets and Performance Analysis
222. The spending variance for power costs in the flexible budget performance report for the
month should be:
223. The spending variance for equipment depreciation in the flexible budget performance report
for the month should be:
Chapter 09 Flexible Budgets and Performance Analysis
Wayland Corporation’s static planning budget for April appears below. The company bases its
budgets on machine-hours.
In April, the actual number of machine-hours was 6,600, the actual supplies cost was $64,040,
the actual power cost was $7,070, the actual salaries cost was $88,300, and the actual equipment
depreciation was $7,430.
224. The spending variance for supplies cost in the flexible budget performance report for the
month should be:
Chapter 09 Flexible Budgets and Performance Analysis
225. The spending variance for power cost in the flexible budget performance report for the
month should be:
226. The spending variance for equipment depreciation in the flexible budget performance report
for the month should be:
Chapter 09 Flexible Budgets and Performance Analysis
Privitera Printing uses two measures of activity, press runs and book set-ups, in the cost
formulas in its budgets and performance reports. The cost formula for wages and salaries is
$7,220 per month plus $650 per press run plus $1,110 per book set-up. The company expected
its activity in January to be 188 press runs and 117 book set-ups, but the actual activity was 191
press runs and 114 book set-ups. The actual cost for wages and salaries in January was $269,270.
227. The wages and salaries in the planning budget for January would be closest to:
228. The wages and salaries in the flexible budget for January would be closest to:
Chapter 09 Flexible Budgets and Performance Analysis
229. The activity variance for wages and salaries in January would be closest to:
30. The spending variance for wages and salaries in January would be closest to:
Chapter 09 Flexible Budgets and Performance Analysis
Sterr Air uses two measures of activity, flights and passengers, in the cost formulas in its
budgets and performance reports. The cost formula for plane operating costs is $49,340 per
month plus $2,635 per flight plus $2 per passenger. The company expected its activity in January
to be 73 flights and 191 passengers, but the actual activity was 75 flights and 193 passengers.
The actual cost for plane operating costs in January was $246,440.
231. The plane operating costs in the planning budget for January would be closest to:
232. The plane operating costs in the flexible budget for January would be closest to:
Chapter 09 Flexible Budgets and Performance Analysis
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233. The activity variance for plane operating costs in January would be closest to:
234. The spending variance for plane operating costs in January would be closest to:
Essay Questions
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235. Galligan Corporation bases its budgets on the activity measure customers served. During
July, the company planned to serve 30,000 customers. The company has provided the following
data concerning the formulas it uses in its budgeting:
The company has also furnished its income statement for July:
Required:
Prepare a report showing the company’s activity variances for July. Indicate in each case whether
the variance is favorable (F) or unfavorable (U).
Chapter 09 Flexible Budgets and Performance Analysis
236. Voytek Corporation bases its budgets on the activity measure customers served. During
October, the company planned to serve 36,000 customers, but actually served 34,000 customers.
The company has provided the following data concerning the formulas it uses in its budgeting:
Required:
Prepare a report showing the company’s activity variances for October. Indicate in each case
whether the variance is favorable (F) or unfavorable (U).