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Dinham 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 March, the kennel budgeted for 2,000 tenant-days, but its actual level of activity was 2,040 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Dinham 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 March, the kennel budgeted for 2,000 tenant-days, but its actual level of activity was 2,040 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Actual results for March: The spending variance for facility expenses in March would be closest to: A) $78 F B) $170 U C) $78 U D) $170 F Actual results for March: Dinham 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 March, the kennel budgeted for 2,000 tenant-days, but its actual level of activity was 2,040 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Actual results for March: The spending variance for facility expenses in March would be closest to: A) $78 F B) $170 U C) $78 U D) $170 F The spending variance for facility expenses in March would be closest to:


A) $78 F
B) $170 U
C) $78 U
D) $170 F

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Rients 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 October. Rients 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 October. When the company prepared its planning budget at the beginning of October, it assumed that 39 customers would have been served. However, 44 customers were actually served during October. The spending variance for Travel expenses for October would have been closest to: A) $300 F B) $300 U C) $3,200 F D) $3,200 U When the company prepared its planning budget at the beginning of October, it assumed that 39 customers would have been served. However, 44 customers were actually served during October. The spending variance for "Travel expenses" for October would have been closest to:


A) $300 F
B) $300 U
C) $3,200 F
D) $3,200 U

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Actual costs are determined by plugging the actual level of activity for the period into the cost formulas used in flexible budgets.

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Bernes 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 October, the kennel budgeted for 2,700 tenant-days, but its actual level of activity was 2,720 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: Bernes 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 October, the kennel budgeted for 2,700 tenant-days, but its actual level of activity was 2,720 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: The activity variance for administrative expenses in October would be closest to: A) $2 F B) $162 F C) $162 U D) $2 U The activity variance for administrative expenses in October would be closest to:


A) $2 F
B) $162 F
C) $162 U
D) $2 U

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Gayner 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 November. Gayner 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 November. When the company prepared its planning budget at the beginning of November, it assumed that 30 wells would have been serviced. However, 34 wells were actually serviced during November. The spending variance for Servicing materials for November would have been closest to: A) $2,200 U B) $200 U C) $2,200 F D) $200 F When the company prepared its planning budget at the beginning of November, it assumed that 30 wells would have been serviced. However, 34 wells were actually serviced during November. The spending variance for "Servicing materials" for November would have been closest to:


A) $2,200 U
B) $200 U
C) $2,200 F
D) $200 F

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Korsak 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. Korsak 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. The planning budget for October was based on serving 23 customers, but a total of 19 customers were actually served during October. The activity variance for revenue for October would have been closest to: A) $22,000 U B) $20,400 U C) $22,000 F D) $20,400 F The planning budget for October was based on serving 23 customers, but a total of 19 customers were actually served during October. The activity variance for revenue for October would have been closest to:


A) $22,000 U
B) $20,400 U
C) $22,000 F
D) $20,400 F

Correct Answer

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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. 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. 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. 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 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. 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

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When the activity measure is the number of units sold, the revenue variance is favorable if the average actual selling price is greater than expected.

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Guareno Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,450 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting: Guareno Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,450 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting: Actual results for December: The spending variance for medical supplies in December would be closest to: A) $720 F B) $450 U C) $720 U D) $450 F Actual results for December: Guareno Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,500 client-visits, but its actual level of activity was 2,450 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting: Actual results for December: The spending variance for medical supplies in December would be closest to: A) $720 F B) $450 U C) $720 U D) $450 F The spending variance for medical supplies in December would be closest to:


A) $720 F
B) $450 U
C) $720 U
D) $450 F

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Rogstad Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 6,700 units, but its actual level of activity was 6,670 units. The company has provided the following data concerning the formulas to be used in its budgeting: Rogstad Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 6,700 units, but its actual level of activity was 6,670 units. The company has provided the following data concerning the formulas to be used in its budgeting: The activity variance for direct labor in March would be closest to: A) $2,406 U B) $216 U C) $216 F D) $2,406 F The activity variance for direct labor in March would be closest to:


A) $2,406 U
B) $216 U
C) $216 F
D) $2,406 F

Correct Answer

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A revenue variance is the difference between what the total sales revenue should be, given the actual level of activity of the period, and the actual total sales revenue.

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Moncrief Corporation bases its budgets on machine-hours. The company's static planning budget for July appears below: Moncrief Corporation bases its budgets on machine-hours. The company's static planning budget for July appears below: Actual results for the month were: The spending variance for power costs in the flexible budget performance report for the month should be: A) $2,060 F B) $2,060 U C) $300 F D) $300 U Actual results for the month were: Moncrief Corporation bases its budgets on machine-hours. The company's static planning budget for July appears below: Actual results for the month were: The spending variance for power costs in the flexible budget performance report for the month should be: A) $2,060 F B) $2,060 U C) $300 F D) $300 U The spending variance for power costs in the flexible budget performance report for the month should be:


A) $2,060 F
B) $2,060 U
C) $300 F
D) $300 U

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Hubbard 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 January, the kennel budgeted for 2,100 tenant-days, but its actual level of activity was 2,060 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting: Hubbard 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 January, the kennel budgeted for 2,100 tenant-days, but its actual level of activity was 2,060 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting: Actual results for January: The facility expenses in the flexible budget for January would be closest to: A) $14,157 B) $14,712 C) $15,170 D) $15,062 Actual results for January: Hubbard 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 January, the kennel budgeted for 2,100 tenant-days, but its actual level of activity was 2,060 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting: Actual results for January: The facility expenses in the flexible budget for January would be closest to: A) $14,157 B) $14,712 C) $15,170 D) $15,062 The facility expenses in the flexible budget for January would be closest to:


A) $14,157
B) $14,712
C) $15,170
D) $15,062

Correct Answer

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Wyzard 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. Wyzard 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. When the company prepared its planning budget at the beginning of February, it assumed that 37 containers would have been refurbished. However, 32 containers were actually refurbished during February. The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for February would have been closest to: A) $1,800 F B) $17,200 F C) $1,800 U D) $17,200 U When the company prepared its planning budget at the beginning of February, it assumed that 37 containers would have been refurbished. However, 32 containers were actually refurbished during February. The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for February would have been closest to:


A) $1,800 F
B) $17,200 F
C) $1,800 U
D) $17,200 U

Correct Answer

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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. 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. A total of 42 wells were actually serviced during October. 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 A total of 42 wells were actually serviced during October. 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

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Which of the following may appear on a flexible budget performance report?


A) An unfavorable activity variance.
B) A favorable revenue variance.
C) An unfavorable spending variance.
D) All of the above may appear on a flexible budget performance report.

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Lenci Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,100 units, but its actual level of activity was 5,050 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Lenci Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,100 units, but its actual level of activity was 5,050 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Actual results for May: The spending variance for manufacturing overhead in May would be closest to: A) $160 U B) $225 U C) $225 F D) $160 F Actual results for May: Lenci Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,100 units, but its actual level of activity was 5,050 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Actual results for May: The spending variance for manufacturing overhead in May would be closest to: A) $160 U B) $225 U C) $225 F D) $160 F The spending variance for manufacturing overhead in May would be closest to:


A) $160 U
B) $225 U
C) $225 F
D) $160 F

Correct Answer

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In a flexible budget, when the activity declines, the total variable cost also declines.

Correct Answer

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Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,900 units, but its actual level of activity was 5,940 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,900 units, but its actual level of activity was 5,940 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Actual results for May: The direct labor in the planning budget for May would be closest to: A) $22,786 B) $23,010 C) $22,633 D) $23,166 Actual results for May: Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,900 units, but its actual level of activity was 5,940 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Actual results for May: The direct labor in the planning budget for May would be closest to: A) $22,786 B) $23,010 C) $22,633 D) $23,166 The direct labor in the planning budget for May would be closest to:


A) $22,786
B) $23,010
C) $22,633
D) $23,166

Correct Answer

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Ruozzo 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 July. Ruozzo 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 July. When the company prepared its planning budget at the beginning of July, it assumed that 27 customers would have been served. However, 22 customers were actually served during July. The activity variance for net operating income for July would have been closest to: A) $16,400 F B) $15,500 F C) $15,500 U D) $16,400 U When the company prepared its planning budget at the beginning of July, it assumed that 27 customers would have been served. However, 22 customers were actually served during July. The activity variance for net operating income for July would have been closest to:


A) $16,400 F
B) $15,500 F
C) $15,500 U
D) $16,400 U

Correct Answer

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