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1. Teel Printing uses two measures of activity, press runs and book set-ups, in the cost formulas in its budgets and performance reports. The cost

1. Teel 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 $8,850 per month plus $400 per press run plus $950 per book set-up. The company expected its activity in July to be 204 press runs and 111 book set-ups, but the actual activity was 201 press runs and 110 book set-ups. The actual cost for wages and salaries in July was $193,780.

The activity variance for wages and salaries in July would be closest to:

$2,120 U

$2,150 U

$2,150 F

$2,120 F

2. Ibsen Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,340 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:


Fixed Element per Month

Variable element per client-visit

Revenue


-


$

40.00







Personnel expenses

$

32,400


$

13.40

Medical supplies


1,500



4.80

Occupancy expenses


9,100



2.10

Administrative expenses


6,700



0.40

Total expenses

$

49,700


$

20.70



Actual results for December:



Revenue

$

134,170


Personnel expenses

$

80,776


Medical supplies

$

17,302


Occupancy expenses

$

15,754


Administrative expenses

$

8,296




The occupancy expenses in the flexible budget for December would be closest to:

Garrison 16e Rechecks 2017-10-31

$16,114

$15,565

$15,945

$16,030

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