#2

Witten Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes.

	Fixed Element per Month			Variable Element per Customer Served
Revenue				$	6,600
Employee salaries and wages	$	55,100		$	1,000
Travel expenses				$	600
Other expenses	$	43,100

A total of 27 customers were actually served during January.

The revenue in the company's flexible budget for January would have been closest to:

$145,200

$147,400

$180,900

$178,200

#3

Dinham 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 March, the kennel budgeted for 2,000 tenant-days, but its actual level of activity was 2,040 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March:

Data used in budgeting:

	Fixed element per month			Variable element per tenant-day
Revenue				$	35.40
Wages and salaries	$	3,000		$	6.60
Food and supplies		400			12.20
Facility expenses		9,600			2.30
Administrative expenses		7,800			0.20
Total expenses	$	20,800		$	21.30

Actual results for March:

Revenue	$	69,576
Wages and salaries	$	16,204
Food and supplies	$	25,008
Facility expenses	$	14,122
Administrative expenses	$	8,238

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 March would be closest to:

$1,960 F

$1,396 F

$1,960 U

$1,396 U

#4

Pickrel Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes.

	Fixed Element per Month			Variable Element per Well Serviced
Revenue				$	5,500
Employee salaries and wages	$	53,700		$	1,300
Servicing materials				$	600
Other expenses	$	34,400

When the company prepared its planning budget at the beginning of November, it assumed that 27 wells would have been serviced. However, 31 wells were actually serviced during November.

The amount shown for Servicing materials in the planning budget for November would have been closest to:

$16,200

$19,000

$18,600

$16,548