1. If activity is higher than expected, total variable costs should be higher than expected. If activity is lower than expected, total variable costs should be lower than expected. A) True B) False

2. A flexible budget can be used to determine what costs should have been at a given level of activity. A) True t B) False 3. TB 35 Orscheln Snow Removal's cost formula for its vehicle operating cost is $2,800 per month plus $381 per snow-day. For the month of February, the company planned for activity of 17 snow-days, but the actual level of activity was 14 snow-days. The actual vehicle operating cost for the month was $7,920. The activity variance for vehicle operating cost in February would be closest to: A) $1,357 F B) $1,357 U C) $1,143 F D) $1,143 U

4. 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 mater TB 60 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 flexible budget for November would be closest to: A) $2,440 B) $1,541 C) $2,726 D) $2,406 5. TB 21 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? A) $7,159.20 B) $6,680.60 C) $7,184.80 D) $26,154.40

6. TB 43 Soehl Natural Dying Corporation measures its activity in terms of skeins of yarn dyed. Last month, the budgeted level of activity was 14,100 skeins and the actual level of activity was 13,700 skeins. The company's owner budgets for dye costs, a variable cost, at $0.40 per skein. The actual dye cost last month was $4,510. In the company's flexible budget performance report for last month, what would have been the spending variance for dye costs? A) $970 F B) $132 F C) $160 F D) $1,130 F

7. TB 23 Gummer Hospital bases its budgets on patient-visits. The hospital's static budget for February appears below: The total overhead cost at an activity level of 10,800 patient-visits per month should be: A) $317,520 B) $303,810 C) $291,060 D) $302,850

8. TB 55 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 manufacturing overhead in the planning budget for May would be closest to: A) $98,340 B) $97,900 C) $102,710 D) $102,165

9. TB 31 Stuchlik 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 $430 per month plus $80 per job plus $14 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 January to be 20 jobs and 190 meals, but the actual activity was 21 jobs and 194 meals. The actual cost for catering supplies in January was $4,850. The catering supplies in the planning budget for January would be closest to: A) $4,850 B) $4,619 C) $4,690 D) $4,826 10. TB 30 Bargas Framing's cost formula for its supplies cost is $2,240 per month plus $6 per frame. For the month of May, the company planned for activity of 808 frames, but the actual level of activity was 810 frames. The actual supplies cost for the month was $7,090. The supplies cost in the flexible budget for May would be closest to: A) $7,088 B) $7,090 C) $7,106 D) $7,100