5.

Capizzi Corporation has an activity-based costing system with three activity cost pools-Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

Overhead costs:
Equipment depreciation	$84,000
Supervisory expense	$5,500

Distribution of Resource Consumption Across Activity Cost Pools:
	Activity Cost Pools
	Machining	Order Filling	Other
Equipment depreciation	0.50	0.20	0.30
Supervisory expense	0.50	0.10	0.40

Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:

Activity:
	MHs (Machining)	Orders
Product Y7	1,430	1,240
Product V2	9,170	2,230
Total	10,600	3,470

The activity rate for the Order Filling activity cost pool under activity-based costing is closest to:

a) $50.00 per order

b) $2.00 per order

c) $5.00 per order

d) $2.43 per order

12.

The Adams Corporation, a merchandising firm, has budgeted its activity for November according to the following information:

Sales at $610,000, all for cash.

Merchandise inventory on October 31 was $280,000.

The cash balance November 1 was $34,000.

Selling and administrative expenses are budgeted at $108,000 for November and are paid for in cash.

Budgeted depreciation for November is $57,000.

The planned merchandise inventory on November 30 is $310,000.

The cost of goods sold is 70% of the selling price.

All purchases are paid for in cash.

There is no interest expense or income tax expense.

The budgeted cash receipts for November are:

a) $475,000

b) 610,000

c) $135,000

d) $667,000

14.

Sissac 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 $640 per month plus $113 per job plus $29 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 May to be 21 jobs and 130 meals, but the actual activity was 16 jobs and 135 meals. The actual cost for catering supplies in May was $6,250. The spending variance for catering supplies in May would be closest to:

a) $553 U

b) $553 F

c) $113 F

d) $113 U

16.

Gourley Clinic uses client-visits as its measure of activity. During August, the clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,620 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting:

	Fixed element per month	Variable element per client-visit
Revenue		$40.00
Personnel expenses	$36,000	$11.20
Medical supplies	2,000	8.00
Occupancy expenses	9,000	2.00
Administrative expenses	6,000	0.2
Total expenses	$53,000	$21.40

The activity variance for administrative expenses in August would be closest to:

a) $76 F

b) $76 U

c) $16 U

d) $16 F

18.

Roye 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 September, Kennel budgeted for 4,700 tenant-days, but its actual level of activity was 4,780 tenant-days. Kennel has provided the following data concerning the formulas used in its budgeting and its actual results for September:

Data used in budgeting:

	Fixed element per month	Variable element per tenant-day
Revenue		$35.20
Wages and salaries	$3,600	$8.60
Food and supplies	1,100	15.10
Facility expenses	7,500	4.10
Administrative expenses	7,600	0.50
Total expenses	$19,800	$28.30

Actual results for September:

Revenue	$144,230
Wages and salaries	$28,660
Food and supplies	$74,070
Facility expenses	$27,220
Administrative expenses	$7,106

The spending variance for Food and supplies in September would be closest to:

a) $2,000 F

b) $2,000 U

c) $792 F

d) $792 U