CASES

1.Flexible Budget

So Yummy Restaurant sells fish barbeque. Here is information related to Revenue and Costs/Expenses for June(q is the numberof serving meals)

Formula

Revenue

Rp33.000 q

Direct Material Cost

Rp12.500 q

Direct Labor and salaries

Rp20.800.000

Utility Expenses

Rp1.600.000 + 0,4q

Rent Expense

Rp4.400.000

Miscellenaous Expense

Rp1.200.000 + $1.600q

So Yummy Restaurant makes planning budget for June with assumption there will be 1,800 meals. The actual serving meals is 1,700. The Actual Result for June is as follow:

Revenue

Rp55.840.000

Direct Material Cost

Rp22.220.000

Direct Labor and salaries

Rp20.260.000

Utility Expenses

Rp2.160.000

Rent Expense

Rp4.400.000

Miscellenaous Expense

Rp4.480.000

Required:

Construct flexible budget performance

2.Nice Sleep is hotel chain and its house keeping budget contains the following items:

Variable Cost:

Direct Labor$36.000

Laundry Service$9.000

Supplies$5.000

Total variable$50.000

Fixed Cost:

Supervision$17.000

Inspection cost$1.000

Insurance expenses$2.000

Depreciation$15.000

Total fixed$35.000

The budget was estimated on 4.000-room rental for the month. During December, 3,000 rooms were actually rented, with the following costs incurred

Variable Cost:

Direct Labor$38.000

Laundry Service$7.000

Supplies$5.200

Total variable$50.200

Fixed Cost:

Supervision$19.000

Inspection cost$1.500

Insurance expenses$2.500

Depreciation$14.500

Total fixed$37.500

Required:

a.Determined which item would be controllable by the house keeping manager

b.How much should have been spent during the month for providing of 3.000 rooms?

c.Prepare flexible budget and its variance

3.Critique Variance Report

Terminator Inc provides on-site residential pest extermination services.The company has several mobile teams which are dispatched from a central location in company-owned truck. The company uses the number of jobs to measure activity. At the beginning of April, the company budgeted for 100 jobs, but the actual number of jobs turned out to be 105. A report comparing the budgeted revenues and costs to the actual revenues and costs appears below:

Terminator Inc

Variance Report

For the month ended April 30

Planning BudgetActual ResultsVariances

100105

Revenue$19.500$20.520$1.020F

Expenses:

Mobile team operating cost$10.0000$10.320$320U

Exterminating supplies$1.800$960840F

Advertising$800$8000

Dispatching cost$2.200$2.340140U

Office rent$1.800$1.8000

Insurance$2.100$2.1000\

Total Expense$18.700$18.320380F

Required:

Is the above variance report useful for evaluating how well revenues and costs were controlled during April? Why, or why not?