Question
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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