Question 1

Salyers Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below:  The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 53 guests?

Accepted Answer

A)  $7,159.20
B)  $6,680.60
C)  $7,184.80
D)  $26,154.40E) B) and C)
F) A) and D)

Question 2

The purpose of a flexible budget is to:

Accepted Answer

A)  remove items from performance reports that are not controllable by managers.
B)  permit managers to reduce the number of unfavorable variances that are reported.
C)  update the static planning budget to reflect the actual level of activity of the period.
D)  reduce the amount of conflict between departments when the master budget is prepareD.When a flexible budget is used in performance evaluation, actual costs are compared to what the costs should have been for the actual level of activity during the period rather than to the static planning budget.E) B) and C)
F) B) and D)

Question 3

The medical supplies in the flexible budget for December would be closest to:

Accepted Answer

A)  $23,696
B)  $22,650
C)  $23,318
D)  $22,476E) A) and B)
F) C) and D)

Question 4

Poch Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for September is to be based on 2,700 meals. The diner's director has provided the following cost formulas to use in the budget:  Required:
Prepare the diner's budget for the month of September. The budget will only contain the costs listed above; no revenues will be on the budget.

Accepted Answer

The answer of Poch Memorial Diner is a charity supported...

Question 5

The activity variance for selling and administrative expenses in July would be closest to:

Accepted Answer

A)  $20 U
B)  $20 F
C)  $720 U
D)  $720 FE) A) and C)
F) A) and B)

Question 6

The activity variance for personnel expenses in August would be closest to:

Accepted Answer

A)  $428 F
B)  $2,868 U
C)  $2,868 F
D)  $428 UE) B) and D)
F) All of the above

Question 7

The net operating income in the planning budget for July would be closest to:

Accepted Answer

A)  $22,360
B)  $22,150
C)  $15,082
D)  $15,158E) None of the above
F) A) and C)

Question 8

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).

Accepted Answer

The answer of Galligan Corporation bases its budgets on the...

Question 9

The direct labor in the planning budget for May would be closest to:

Accepted Answer

A)  $22,356
B)  $22,506
C)  $22,440
D)  $22,290E) A) and D)
F) B) and C)

Question 10

The facility expenses in the flexible budget for June would be closest to:

Accepted Answer

A)  $17,933
B)  $17,791
C)  $17,732
D)  $17,700E) A) and D)
F) A) and C)

Question 11

Wartenberg Corporation uses customers served as its measure of activity. The company bases its budgets on the following information: Revenue should be $3.80 per customer served. Wages and salaries should be $38,800 per month plus $1.00 per customer served. Supplies should be $0.60 per customer served. Insurance should be $7,100 per month. Miscellaneous expenses should be $5,100 per month plus $0.30 per customer served.
The company reported the following actual results for January:  Required:
Prepare a report showing the company's revenue and spending variances for January. Label each variance as favorable (F) or unfavorable (U).

Accepted Answer

The answer of Wartenberg Corporation uses customers served as its...

Question 12

At Jacobson Company, indirect labor is a variable cost that varies with direct labor-hours. Last month's performance report showed that actual indirect labor cost totaled $5,780 for the month and that the associated spending variance was $245 F If 24,100 direct labor-hours were actually worked last month, then the flexible budget cost formula for indirect labor must be (per direct labor-hour) :

Accepted Answer

A)  $0.20
B)  $0.25
C)  $0.30
D)  $0.35E) All of the above
F) B) and C)

Question 13

The spending variance for direct materials in April would be closest to:

Accepted Answer

A)  $3,215 U
B)  $2,260 U
C)  $2,260 F
D)  $3,215 FE) B) and C)
F) None of the above

Question 14

The net operating income in the planning budget for December would be closest to:

Accepted Answer

A)  $10,125
B)  $10,016
C)  $14,920
D)  $15,250E) B) and C)
F) A) and B)

Exam 11: Flexible Budgets and Performance Analysis

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The facility expenses in the flexible budget for June would be closest to:

Correct Answer
verified

The net operating income in the planning budget for December would be closest to:

Correct Answer
verified

The spending variance for direct materials in April would be closest to:

Correct Answer
verified

Correct Answer
verified

The medical supplies in the flexible budget for December would be closest to:

Correct Answer
verified

The purpose of a flexible budget is to:

Correct Answer
verified

The activity variance for selling and administrative expenses in July would be closest to:

Correct Answer
verified

Correct Answer
verified

The net operating income in the planning budget for July would be closest to:

Correct Answer
verified

The direct labor in the planning budget for May would be closest to:

Correct Answer
verified

The activity variance for personnel expenses in August would be closest to:

Correct Answer
verified

Exam 11: Flexible Budgets and Performance Analysis

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The facility expenses in the flexible budget for June would be closest to:

Correct AnswerverifiedShow Answer

The net operating income in the planning budget for December would be closest to:

Correct AnswerverifiedShow Answer

The spending variance for direct materials in April would be closest to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The medical supplies in the flexible budget for December would be closest to:

Correct AnswerverifiedShow Answer

The purpose of a flexible budget is to:

Correct AnswerverifiedShow Answer

The activity variance for selling and administrative expenses in July would be closest to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The net operating income in the planning budget for July would be closest to:

Correct AnswerverifiedShow Answer

The direct labor in the planning budget for May would be closest to:

Correct AnswerverifiedShow Answer

The activity variance for personnel expenses in August would be closest to:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified