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 6,100 units, but its actual level of activity was 6,060 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
Revenue		-		$	28.20
Direct labor	$	0		$	3.30
Direct materials		0			10.20
Manufacturing overhead		39,200			1.40
Selling and administrative expenses		24,800			0.30
Total expenses	$	64,000		$	15.20

Actual results for June:

Revenue	$	177,558
Direct labor	$	19,448
Direct materials	$	59,532
Manufacturing overhead	$	47,559
Selling and administrative expenses	$	26,673

The activity variance for net operating income in June would be closest to:

Multiple Choice

• $520 F

• $520 U

• $9,046 U

• $9,046

• 2-

  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 5,200 tenant-days, but its actual level of activity was 5,220 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 element per month			Variable element per tenant-day
  Revenue		-		$	31.70
  Wages and salaries	$	4,200		$	7.70
  Food and supplies		800			12.50
  Facility expenses		8,600			4.70
  Administrative expenses		7,600			0.50
  Total expenses	$	21,200		$	25.40

  Actual results for February:

  Revenue	$	108,980
  Wages and salaries	$	23,620
  Food and supplies	$	36,802
  Facility expenses	$	19,370
  Administrative expenses	$	9,164

  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

• $8,338 F

• $8,338 U

• $8,464 U

• $8,464 F

• 3-

  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 5,100 tenant-days, but its actual level of activity was 5,120 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:

  Revenue		-		$	31.60
  Wages and salaries	$	4,100		$	7.60
  Food and supplies		700			12.40
  Facility expenses		9,100			4.60
  Administrative expenses		8,900			0.40
  Total expenses	$	22,800		$	25.00

  Actual results for February:

  Revenue	$	108,880
  Wages and salaries	$	23,610
  Food and supplies	$	36,801
  Facility expenses	$	19,360
  Administrative expenses	$	9,162

  The activity variance for net operating income in February would be closest to:

  Multiple Choice

• $9,087 F

• $132 F

• $132 U

• $9,087 U

• 4-

  Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,310 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		-		$	39.40
  Personnel expenses	$	35,400		$	10.60
  Medical supplies		1,400			7.40
  Occupancy expenses		8,400			1.40
  Administrative expenses		5,400			0.50
  Total expenses	$	50,600		$	19.90

  The activity variance for net operating income in July would be closest to:

  Multiple Choice

• $1,005 F

• $1,755 F

• $1,005 U

• $1,755 U