Reference no: EM13574482
1.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.
A) True
B) False
2.A favorable spending variance occurs when the actual cost exceeds the amount of that cost in the flexible budget.
A) True
B) False
3.A flexible budget can be used to determine what costs should have been at a given level of activity.
A) True
B) False
4.Wadhams Snow Removal's cost formula for its vehicle operating cost is $1,900 per month plus $430 per snow-day. For the month of December, the company planned for activity of 16 snow-days, but the actual level of activity was 21 snow-days. The actual vehicle operating cost for the month was $11,470. The vehicle operating cost in the planning budget for December would be closest to:
A) $10,930
B) $11,470
C) $8,739
D) $8,780
5.Fullagar Corporation's cost formula for its manufacturing overhead is $15,400 per month plus $11 per machine-hour. For the month of May, the company planned for activity of 7,500 machine-hours, but the actual level of activity was 7,540 machine-hours. The actual manufacturing overhead for the month was $102,710.
The spending variance for manufacturing overhead in May would be closest to:
A) $4,370 U
B) $4,810 F
C) $4,810 U
D) $4,370 F
6.Celius Midwifery's cost formula for its wages and salaries is $2,410 per month plus $292 per birth. For the month of March, the company planned for activity of 113 births, but the actual level of activity was 116 births. The actual wages and salaries for the month was $35,340. The spending variance for wages and salaries in March would be closest to:
A) $942 F
B) $66 F
C) $66 U
D) $942 U
7.Whit Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $380 per month plus $94 per job plus $11 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in October to be 20 jobs and 216 meals, but the actual activity was 19 jobs and 221 meals. The actual cost for catering supplies in October was $4,790. The catering supplies in the flexible budget for October would be closest to:
A) $4,404
B) $4,790
C) $4,636
D) $4,597
8.Fullagar Corporation's cost formula for its manufacturing overhead is $15,400 per month plus $11 per machine-hour. For the month of May, the company planned for activity of 7,500 machine-hours, but the actual level of activity was 7,540 machine-hour
TB 57 Fullagar Corporation's cost formula for its manufacturing overhead is $15,400 per month plus $11 per machine-hour. For the month of May, the company planned for activity of 7,500 machine-hours, but the actual level of activity was 7,540 machine-hours. The actual manufacturing overhead for the month was $102,710.
The activity variance for manufacturing overhead in May would be closest to:
A) $440 U
B) $440 F
C) $4,810 F
D) $4,810 U
9.Mcquain Boat Wash's cost formula for its cleaning equipment and supplies is $1,950 per month plus $20 per boat. For the month of June, the company planned for activity of 85 boats, but the actual level of activity was 125 boats. The actual cleaning equipment and supplies for the month was $4,380.
The spending variance for cleaning equipment and supplies in June would be closest to:
A) $730 U
B) $70 U
C) $70 F
D) $730 F
10.Cadavieco Detailing's cost formula for its materials and supplies is $1,990 per month plus $8 per vehicle. For the month of November, the company planned for activity of 92 vehicles, but the actual level of activity was 52 vehicles. The actual materials and supplies for the month was $2,440.
The materials and supplies in the planning budget for November would be closest to:
A) $2,726
B) $2,406
C) $4,317
D) $2,440
11.Kara Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $310 per month plus $84 per job plus $17 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in July to be 15 jobs and 127 meals, but the actual activity was 14 jobs and 126 meals. The actual cost for catering supplies in July was $3,620. The activity variance for catering supplies in July would be closest to:
A) $109 F
B) $109 U
C) $101 F
D) $101 U
12.Cadavieco Detailing's cost formula for its materials and supplies is $1,990 per month plus $8 per vehicle. For the month of November, the company planned for activity of 92 vehicles, but the actual level of activity was 52 vehicles. The actual materials and supplies for the month was $2,440.
The spending variance for materials and supplies in November would be closest to:
A) $34 F
B) $286 F
C) $34 U
D) $286 U