ALL ANSWERS SHOULD BE CORRECT PLEASE!

Paradiso Medical Clinic measures its activity in terms of patient-visits. Last month, the budgeted level of activity was 1,260 patient-visits and the actual level of activity was 1,250 patient-visits. The cost formula for administrative expenses is $5.00 per patient-visit plus $27,000 per month. The actual administrative expense was $25,300. In the clinic's flexible budget performance report for last month, the spending variance for administrative expenses was:

$7,950 F

$8,000 F

$3,220 U

$50 F

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

Sales at $530,000, all for cash.

Merchandise inventory on October 31 was $240,000.

The cash balance November 1 was $26,000.

Selling and administrative expenses are budgeted at $84,000 for November and are paid for in cash.

Budgeted depreciation for November is $41,000.

The planned merchandise inventory on November 30 is $270,000.

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:

$530,000

$571,000

$395,000

$135,000

(Ignore income taxes in this problem.) The management of Helberg Corporation is considering a project that would require an investment of $185,000 and would last for 6 years. The annual net operating income from the project would be $102,000, which includes depreciation of $19,000. The scrap value of the project's assets at the end of the project would be $25,300. The cash inflows occur evenly throughout the year. The payback period of the project is closest to:

1.8 years 1.5 years 1.3 years 1.5 years

Gwinnett Barbecue Sauce Corporation manufactures a specialty barbecue sauce. Gwinnett has the capacity to manufacture and sell 18,000 cases of sauce each year but is currently only manufacturing and selling 14,800. The following costs relate to annual operations at 14,800 cases:

	Total Cost
Variable manufacturing cost	$192,400
Fixed manufacturing cost	$58,000
Variable selling and administrative cost	$74,000
Fixed selling and administrative cost	$40,000

Gwinnett normally sells its sauce for $30 per case. A local school district is interested in purchasing Gwinnett's excess capacity of 3,200 cases of sauce but only if they can get the sauce for $15 per case. This special order would not affect regular sales or total fixed costs or variable costs per unit. If this special order is accepted, Gwinnett's profits for the year will:

increase by $640

decrease by $44,400

decrease by $28,400

decrease by $9,600

Cadavieco Detailing's cost formula for its materials and supplies is $1,850 per month plus $4 per vehicle. For the month of November, the company planned for activity of 80 vehicles, but the actual level of activity was 45 vehicles. The actual materials and supplies for the month was $2,000.

The materials and supplies in the planning budget for November would be closest to: $2,170 $2,030 $3,761 $2,000

Cadavieco Detailing's cost formula for its materials and supplies is $2,010 per month plus $6 per vehicle. For the month of November, the company planned for activity of 96 vehicles, but the actual level of activity was 56 vehicles. The actual materials and supplies for the month was $2,420.

The spending variance for materials and supplies in November would be closest to:

$74 U $166 U $166 F $74 F

Barrus Corporation makes 45,000 motors to be used in the productions of its power lawn mowers. The average cost per motor at this level of activity is as follows:

Direct materials	$10.40
Direct labor	$9.40
Variable manufacturing overhead	$3.90
Fixed manufacturing overhead	$4.85

This motor has recently become available from an outside supplier for $26.65 per motor. If Barrus decides not to make the motors, none of the fixed manufacturing overhead would be avoidable and there would be no other use for the facilities. If Barrus decides to continue making the motor, how much higher or lower will the company's net operating income be than if the motors are purchased from the outside supplier? Assume that direct labor is a variable cost in this company.

$85,500 lower $308,250 higher $132,750 higher $218,250 higher