Question

41.

Malander 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 November, the kennel budgeted for 3,400 tenant-days, but its actual level of activity was 3,390 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for November:

Data used in budgeting:

	Fixed element per month	Variable element per tenant-day
Revenue	$ 0	$ 28.00
Wages and salaries	$ 2,700	$ 5.40
Food and supplies	500	10.20
Facility expenses	9,600	3.30
Administrative expenses	6,600	0.20
Total expenses	$ 19,400	$ 19.10

Actual results for November:

Revenue	$ 90,470
Wages and salaries	$ 20,606
Food and supplies	$ 35,838
Facility expenses	$ 20,857
Administrative expenses	$ 7,518

The revenue variance for November would be closest to:

rev: 06_30_2020_QC_CS-208650

Multiple Choice

• $4,450 F

• $4,730 U

• $4,730 F

• $4,450 U

37.Ibsen Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 3,300 client-visits, but its actual level of activity was 3,340 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December:

Data used in budgeting:

	Fixed Element per Month	Variable element per client-visit
Revenue	$ 0	$40.00
Personnel expenses	$32,400	$13.40
Medical supplies	1,500	4.80
Occupancy expenses	9,100	2.10
Administrative expenses	6,700	0.40
Total expenses	$49,700	$20.70

Actual results for December:

Revenue	$134,170
Personnel expenses	$ 80,776
Medical supplies	$ 17,302
Occupancy expenses	$ 15,754
Administrative expenses	$ 8,296

The net operating income in the flexible budget for December would be closest to:

rev: 06_29_2020_QC_CS-208650

Multiple Choice

• $13,990

• $14,762

• $11,898

• $12,188

KAB Incorporated, a small retail store, had the following results for May. The budgets for June and July are also given.

	May (actual)	June (budget)	July (budget)
Sales	$ 42,000	$ 40,000	$ 45,000
Less cost of goods sold	21,000	20,000	22,500
Gross margin	21,000	20,000	22,500
Less selling and administrative expenses	20,000	20,000	20,000
Net operating income	$ 1,000	$ 0	$ 2,500

Sales are collected 80% in the month of the sale and the balance in the month following the sale. (There are no bad debts.) The goods that are sold are purchased in the month prior to sale. Suppliers of the goods are paid in the month following the sale. The "selling and administrative expenses" are paid in the month of the sale.

The cash disbursements during June for goods purchased for sale and for selling and administrative expenses should be:

Multiple Choice

• $40,000

• $41,000

• $42,500

• $43,500

39. Pratte Boat Wash's cost formula for its cleaning equipment and supplies is $2,570 per month plus $48 per boat. For the month of April, the company planned for activity of 62 boats, but the actual level of activity was 17 boats. The actual cleaning equipment and supplies for the month was $3,580.

The spending variance for cleaning equipment and supplies in April would be closest to:

Multiple Choice

• $1,966 U

• $194 F

• $194 U

• $1,966 F

Answer 1

41
Actual Revenue	90470
Less: Revenue in flexible budget	94920	=3390*28
Revenue variance for November	4450	U
$4,450 U is correct option
37
Total revenue	133600	=3340*40
Less: Total expenses	118838	=(3340*20.7)+49700
Net operating income in the flexible budget	14762
$14,762 is correct option
3
Disbursements for goods purchased	20000
Disbursements for selling and administrative expenses	20000
Cash disbursements during June	40000
$40,000 is correct option
39
Actual cleaning equipment and supplies	3580
Less: Cleaning equipment and supplies in flexible budget	3386	=2570+(17*48)
Spending variance for cleaning equipment and supplies	194	U
$194 U is correct option