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Solutions Manual, Chapter 9 21
Exercise 9-11 (15 minutes)
Lava
g
e Rapide
Flexible Budget
For the Month Ended August 31
A
ctual cars washed (q) …………………………… 8,800
Revenue ($4.90q) …………………………………. $43,120
Expenses:
Cleanin
g
supplies ($0.80q) ……………………. 7,040
Electricity ($1,200 + $0.15q) …………………. 2,520
A
T
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22 Managerial Accounting, 16th Edition
Exercise 9-12 (20 minutes)
Lavage Rapide
Activity Variances
For the Month Ended August 31
Flexible
Budget
Planning
Budget
Activity
Variances
Cars washed (q) …………………………. 8,800 9,000
Revenue ($4.90q) ………………………. $43,120 $44,100 $980 U
Expenses:
Cleanin
g
supplies ($0.80q) …………. 7,040 7,200 160 F
Electricity ($1,200 + $0.15q) ………. 2,520 2,550 30 F
Maintenance ($0.20q) ……………….. 1,760 1,800 40 F
Wa
g
es and salaries
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Solutions Manual, Chapter 9 23
Exercise 9-13 (20 minutes)
Lavage Rapide
Revenue and Spending Variances
For the Month Ended August 31
Actual
Results
Flexible
Budget
Revenue
and
Spending
Variances
Cars washed (q) …………………….. 8,800 8,800
Revenue ($4.90q) ………………….. $43,080 $43,120 $ 40 U
Expenses:
Cleanin
g
supplies ($0.80q) …….. 7,560 7,040 520 U
Electricity ($1,200 + $0.15q) ….. 2,670 2,520 150 U
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24 Managerial Accounting, 16th Edition
Exercise 9-14 (30 minutes)
Lava
g
e Rapide
Flexible Budget Performance Report
For the Month Ended August 31
Actual
Results
Revenue
and
Spending
Variances
Flexible
Budget
Activity
Variances
Planning
Budget
Cars washed (q) …………………………….. 8,800 8,800 9,000
Revenue ($4.90q) ………………………….. $43,080 $ 40 U $43,120 $980 U $44,100
Expenses:
Cleanin
g
supplies ($0.80q) …………….. 7,560 520 U 7,040 160 F 7,200
Electricity ($1,200 + $0.15q) ………….. 2,670 150 U 2,520 30 F 2,550
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Solutions Manual, Chapter 9 25
Exercise 9-15 (45 minutes)
1. The planning budget appears below. Note that the report does not
include revenue or net operating income because the production
department is a cost center that does not have any revenue.
Packa
g
in
g
Solutions Corporation
Production Department Planning Budget
For the Month Ended March 31
Bud
g
eted labor-hours (q) ……………………….. 8,000
Direct labor ($15.80q)……………………………. $126,400
Indirect labor ($8,200 + $1.60q) ……………… 21,000
2. The flexible budget appears below. Like the planning budget, this report
does not include revenue or net operating income because the
production department is a cost center that does not have any revenue.
Packa
g
in
g
Solutions Corporation
Production Department Flexible Budget
For the Month Ended March 31
A
ctual labor-hours (q) ……………………………. 8,400
Direct labor ($15.80q)……………………………. $132,720
Indirect labor ($8,200 + $1.60q) ……………… 21,640
Utilities ($6,400 + $0.80q) ……………………… 13,120
T
T
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26 Managerial Accounting, 13th Edition
Exercise 9-15 (continued)
3. The flexible budget performance report appears below. This report does not include revenue or net
operating income because the production department is a cost center that does not have any
revenue.
Packa
g
in
g
Solutions Corporation
Production Department Flexible Budget Performance Report
For the Month Ended March 31
Actual
Results
Spending
Variances
Flexible
Budget
Activity
Variances
Planning
Budget
Labor-hours (q) …………………………. 8,400 8,400 8,000
Direct labor ($15.80q) ………………… $134,730 $2,010 U $132,720 $6,320 U $126,400
Indirect labor ($8,200 + $1.60q) …… 19,860 1,780 F 21,640 640 U 21,000
Utilities ($6,400 + $0.80q) …………… 14,570 1,450 U 13,120 320 U 12,800
Supplies ($1,100 + $0.40q)………….. 4,980 520 U 4,460 160 U 4,300
Equipment depreciation
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Solutions Manual, Chapter 9 27
Exercise 9-15 (continued)
4. The overall unfavorable activity variance of $9,680 occurred because the
actual level of activity exceeded the budgeted level of activity. The
production manager certainly should not be held responsible for this
unfavorable variance if this increased activity was due to more orders or
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28 Managerial Accounting, 16th Edition
Exercise 9-16 (20 minutes)
Via Gelato
Revenue and Spending Variances
For the Month Ended June 30
Actual
Results
Flexible
Budget
Revenue and
Spending
Variances
Liters (q) ………………………………. 6,200 6,200
Revenue ($12.00q) …………………. $71,540 $74,400 $2,860 U
Expenses:
Raw materials ($4.65q) ………….. 29,230 28,830 400 U
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Solutions Manual, Chapter 9 29
Exercise 9-17 (30 minutes)
A
irQual Test Corporation
Flexible Budget Performance Report
For the Month Ended February 28
Actual
Results
Revenue
and
Spending
Variances
Flexible
Budget
Activity
Variances
Planning
Budget
Jobs (q) ……………………………………….. 52 52 50
Revenue ($360.00q) ……………………….. $18,950 $230 F $18,720 $720 F $18,000
Expenses:
T
echnician wa
g
es ($6,400).……………. 6,450 50 U 6,400 0 6,400
Mobile lab operatin
g
expenses
A
T
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30 Managerial Accounting, 16th Edition
Exercise 9-18 (30 minutes)
The flexible budget performance report for September appears below:
Gourmand Cookin
g
School
Flexible Budget Performance Report
For the Month Ended September 30
Actual
Results
Revenue
and
Spending
Variances
Flexible
Budget
Activity
Variances
Planning
Budget
Courses (q1) ……………………………. 3 3 3
Students (q2) …………………………… 42 42 45
Revenue ($800q2) …………………….. $32,400 $1,200 U $33,600 $2,400 U $36,000
Expenses:
Instructor wa
g
es ($3,080q1) …….. 9,080 160 F 9,240 0 9,240