2.

Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 5,000 units, but its actual level of activity was 4,960 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Fixed element per month Variable element per unit $30.00 Revenue $ 0 Direct labor Direct materials Manufacturing overhead Selling and administrative expenses Total expenses 38,100 23,700 $61,800 $ 2.90 10.80 1.10 0.40 $15.20 Actual results for June: Revenue $ 151, 350 Direct labor $ 13,867 Direct materials $ 51,343 Manufacturing overhead $ 43,486 Selling and administrative expenses $ 25,754 The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for June would be closest to: Multiple Choice 0 $4,700 u $4,700 F O $5,292 V $5,292 F Paulis Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant- day. During February, the kennel budgeted for 5,400 tenant-days, but its actual level of activity was 5,420 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting: Fixed Variable element element per per month tenant-day $31.90 Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses Total expenses $ 4,400 500 8,800 7,800 $21,500 $ 7.90 12.70 4.90 0.20 $25.70 Actual results for February: Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses $109, 180 $ 23,640 $ 36,804 $ 19,390 $ 9,168 The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for February would be closest to: Multiple Choice o $8,074 o $8,074U o $8,198 U o $8,198 E