Question 1

Everyone Deserves to Smile mobile dentist office budgeted for 4335 patient visits a year. Everyone Deserves to Smile actually saw 4435 patients during the year and they have provided the following data:  Based on the given information, what is the flexible budget variance for admin expenses?
A)$1667.5 Unfavorable
B)$1667.5 Favorable
C)$1617.5 Unfavorable
D)$1617.5 Favorable

Accepted Answer

The answer of Everyone Deserves to Smile mobile dentist office...

Question 2

A graph of a flexible budget formula reflects fixed costs of $40,000 per month and total costs of $84,000 at a volume of 4000 units. Assuming the relevant range is 1,000 to 20,000 units, the graph would reflect total monthly costs at 8000 units of what dollar amount?
A)$128,000
B)$84,000
C)$212,000
D)$88,000

Accepted Answer

To find the total monthly costs at 8000 units, first, calculate the variable cost per unit. The total costs at 4000 units are $84,000, which includes fixed costs of $40,000. Therefore, the total variable costs at 4000 units are $84,000 - $40,000 = $44,000. The variable cost per unit is $44,000 / 4000 = $11. To find the total costs at 8000 units, multiply the variable cost per unit by 8000 and add the fixed costs: ($11 * 8000) + $40,000 = $88,000 + $40,000 = $128,000.

Question 3

A company's flexible budget for 93,000 units of production showed sales of $300,000; variable costs of $150,000; and fixed costs of $90,000. What net operating income would you expect the company to earn if it produces and sells 98,000 units? (Assume 98,000 units is in the relevant range.)

Accepted Answer

The answer of A company's flexible budget for 93,000 units...

Question 4

Everyone Deserves to Smile mobile dentist office budgeted for 4375 patient visits a year. Everyone Deserves to Smile actually saw 4465 patients during the year and they have provided the following data:  Based on the given information, what is the flexible budget variance for revenue?
A)$87,285 Unfavorable
B)$6390 Favorable
C)$6390 Unfavorable
D)$87,285 Favorable

Accepted Answer

The answer of Everyone Deserves to Smile mobile dentist office...

Question 5

Percy Corporation sells a unit of its product for $12.00, resulting in a contribution margin of $7.00 per unit. Fixed costs are budgeted at $50,000 per quarter for volumes up to 12,000 units and $80,000 for volumes exceeding 12,000 units.
Prepare the flexible budget for the next quarter for volume levels of 11,000, 13,000, and 16,000 units.

Accepted Answer

The answer of Percy Corporation sells a unit of its...

Question 6

Krazy Kayaks sells its entry-level kayaks for $750 each. Its variable cost is $500 per kayak. Fixed costs are $25,000 per month for volumes up to 1100 kayaks. Above 1100 kayaks, monthly fixed costs are $60,000. What is the budgeted operating income at a level of 2500 kayaks per month?
A)$625,000
B)$1,815,000
C)$565,000
D)$600,000

Accepted Answer

For 2500 kayaks, the total revenue is $750 * 2500 = $1,875,000. The variable cost is $500 * 2500 = $1,250,000. Since the production is above 1100 kayaks, the fixed cost is $60,000. Therefore, the operating income is $1,875,000 - $1,250,000 - $60,000 = $565,000.

Question 7

Energy Efficient Corporation provided the following partially completed monthly flexible budget. Complete the flexible budget.

Accepted Answer

The answer of Energy Efficient Corporation provided the following partially...

Question 8

Everyone Deserves to Smile mobile dentist office budgeted for 4305 patient visits a year. Everyone Deserves to Smile actually saw 4400 patients during the year and they have provided the following data:  Based on the given information, what is the volume variance for personnel expenses?
A)$7000 Unfavorable
B)$0
C)$7000 Favorable
D)Cannot be determined

Accepted Answer

The answer of Everyone Deserves to Smile mobile dentist office...

Question 9

Southern Instruments makes calculators for business applications. The budgeted selling price is $120 per calculator, the variable rate is $81 per calculator and budgeted fixed costs are $160,000 per month. What is the budgeted operating income for 16,000 calculators sold in a month?
A)$624,000
B)$1,456,000
C)$1,920,000
D)$464,000

Accepted Answer

The answer of Southern Instruments makes calculators for business applications....

Question 10

Sitz Company makes chairs. The budgeted selling price is $55 per chair, the variable rate is $25 per chair and budgeted fixed costs are $20,000 per month. What is the budgeted operating income for 3100 chairs sold in a month?
A)$97,500
B)$93,000
C)$73,000
D)$170,500

Accepted Answer

The budgeted operating income can be calculated as follows: (Selling price per chair - Variable cost per chair) * Number of chairs sold - Fixed costs = ($55 - $25) * 3100 - $20,000 = $30 * 3100 - $20,000 = $93,000 - $20,000 = $73,000.

Question 11

Davis Corporation manufactures and sells portable radios. The radio sells for $60 per unit and its variable costs per unit are $20. Fixed costs are $52,000 per month for sales volumes up to 30,000 radios. If more than 30,000 radios are sold, the fixed costs will be $40,000. The flexible budget would reflect what monthly operating income for a sales volume of 37,000 radios?
A)$40,000
B)$1,440,000
C)$2,220,000
D)$1,480,000

Accepted Answer

The answer of Davis Corporation manufactures and sells portable radios....

Question 12

An unfavorable flexible budget variance for variable expenses would indicate that:
A)fewer units were actually sold than the company had anticipated.
B)the expenses of the company were less than what they had planned.
C)more units were actually sold than the company had originally budgeted to sell.
D)actual variable expenses were higher than the flexible budget variable expenses.

Accepted Answer

An unfavorable flexible budget variance for variable expenses means that the actual variable expenses were higher than what the company had budgeted for in its flexible budget. This could be due to multiple factors such as an increase in material costs, increased labor cost, or higher utility expenses.

Question 13

Sound Design sells its computer speakers for $135 per set. Its variable cost is $85 per set of speakers. Fixed costs are $85,000 per month for volumes up to 2600 sets of speakers. Above 2600 sets, monthly fixed costs are $126,000. What is the budgeted operating income (loss)at a sales level of 2200 sets of speakers per month?
A)Operating loss of $16,000
B)Operating income of $110,000
C)Operating income of $25,000
D)Operating income of $212,000

Accepted Answer

Operating income can be calculated using the formula: Operating Income = (Selling Price per Unit - Variable Cost per Unit) * Number of Units Sold - Fixed Costs. For 2200 sets, the calculation is: ($135 - $85) * 2200 - $85,000 = $25,000.

Question 14

Everyone Deserves to Smile mobile dentist office budgeted for 4325 patient visits a year. Everyone Deserves to Smile actually saw 4415 patients during the year and they have provided the following data:  Based on the given information, what is the volume variance for revenue?
A)$90 Favorable
B)$0
C)$6750 Unfavorable
D)$6750 Favorable

Accepted Answer

To calculate volume variance for revenue, we need to find the difference between the actual number of patients seen and the budgeted number of patients and multiply it by the budgeted revenue per patient.

Budgeted revenue per patient = $150 
Budgeted patients = 4325 
Actual patients = 4415

Volume variance for revenue = (4415 - 4325) x $150 
= 90 x $150 
= $13,500

Since the actual revenue exceeded the budgeted revenue, the variance is favorable. Therefore, the correct answer is D) $6750 Favorable.

Question 15

Sound Design sells its computer speakers for $115 per set. Its variable cost is $70 per set of speakers. Fixed costs are $85,000 per month for volumes up to 2300 sets of speakers. Above 2300 sets, monthly fixed costs are $163,000. What is the budgeted operating income (loss)at a sales level of 2900 sets of speakers per month?
A)Operating loss of $32,500
B)Operating income of $130,500
C)Operating income of $45,500
D)Operating income of $170,500

Accepted Answer

The answer of Sound Design sells its computer speakers for...

Question 16

Everyone Deserves to Smile mobile dentist office budgeted for 4330 patient visits a year. Everyone Deserves to Smile actually saw 4415 patients during the year and they have provided the following data:  Based on the given information, what is the flexible budget variance for personnel expenses?
A)$7000 Unfavorable
B)$0
C)$7000 Favorable
D)Cannot be determined

Accepted Answer

The answer of Everyone Deserves to Smile mobile dentist office...

Question 17

A favorable flexible budget variance for variable expenses would indicate that:
A)fewer units were actually sold than the company had anticipated.
B)actual variable expenses of the company were less than the flexible budget variable expenses.
C)more units were actually sold than the company had originally budgeted to sell.
D)actual variable expenses were higher than the flexible budget variable expenses.

Accepted Answer

A favorable flexible budget variance for variable expenses means that the actual variable expenses were less than what was expected in the flexible budget. This could happen if the company found ways to reduce variable costs, such as negotiating better prices for materials or improving production efficiency, or if actual sales were lower than anticipated.

Question 18

Krazy Kayaks sells its entry-level kayaks for $650 each. Its variable cost is $300 per kayak. Fixed costs are $21,000 per month for volumes up to 1700 kayaks. Above 1700 kayaks, monthly fixed costs are $60,000. What is the budgeted operating income at a level of 400 kayaks per month?
A)$119,000
B)$140,000
C)$239,000
D)$80,000

Accepted Answer

The budgeted operating income is calculated as follows:  Revenue = 400 kayaks * $650 = $260,000  Variable Costs = 400 kayaks * $300 = $120,000  Fixed Costs = $21,000 (since 400 kayaks is below 1700)  Operating Income = Revenue - Variable Costs - Fixed Costs = $260,000 - $120,000 - $21,000 = $119,000.

Question 19

Summer Nights sells bottles of bug spray for $8.00 each. Variable costs are $2.00 per bottle, while fixed costs are $40,000 per month for volumes up to 40,000 bottles of spray and $58,000 per month for volumes above 40,000 bottles of spray. The flexible budget would reflect monthly operating income for 10,000 bottles of lotion and 22,000 bottles of lotion of what dollar amounts?
A)$40,000 and $92,000, respectively
B)$20,000 and $92,000, respectively
C)$80,000 and $176,000, respectively
D)$2000 and $118,000, respectively

Accepted Answer

For 10,000 bottles of spray:
Revenue = 10,000 x $8.00 = $80,000
Variable costs = 10,000 x $2.00 = $20,000
Fixed costs = $40,000 (since volume is below 40,000 bottles)
Operating income = Revenue - Variable costs - Fixed costs
Operating income = $80,000 - $20,000 - $40,000 = $20,000

For 22,000 bottles of spray:
Revenue = 22,000 x $8.00 = $176,000
Variable costs = 22,000 x $2.00 = $44,000
Fixed costs = $58,000 (since volume is above 40,000 bottles)
Operating income = Revenue - Variable costs - Fixed costs
Operating income = $176,000 - $44,000 - $58,000 = $74,000

Therefore, the flexible budget would reflect monthly operating income for 10,000 bottles of spray and 22,000 bottles of spray of $20,000 and $74,000, respectively. The closest answer choice to this is B.

Question 20

An unfavorable volume variance for variable expenses would indicate that:
A)fewer units were actually sold than the company had anticipated.
B)the expenses of the company were less than what they had planned.
C)more units were actually sold than the company had originally budgeted to sell.
D)actual variable expenses were higher than the flexible budget variable expenses.

Accepted Answer

An unfavorable volume variance for variable expenses suggests that more units were sold than originally budgeted, leading to higher variable expenses than planned.

Quiz 10: Performance Evalulation

Everyone Deserves to Smile mobile dentist office budgeted for 4335 patient visits a year. Everyone Deserves to Smile actually saw 4435 patients during the year and they have provided the following data: Based on the given information, what is the flexible budget variance for admin expenses?

A graph of a flexible budget formula reflects fixed costs of $40,000 per month and total costs of $84,000 at a volume of 4000 units. Assuming the relevant range is 1,000 to 20,000 units, the graph would reflect total monthly costs at 8000 units of what dollar amount?

A company's flexible budget for 93,000 units of production showed sales of $300,000; variable costs of $150,000; and fixed costs of $90,000. What net operating income would you expect the company to earn if it produces and sells 98,000 units? (Assume 98,000 units is in the relevant range.)

Everyone Deserves to Smile mobile dentist office budgeted for 4375 patient visits a year. Everyone Deserves to Smile actually saw 4465 patients during the year and they have provided the following data: Based on the given information, what is the flexible budget variance for revenue?

Krazy Kayaks sells its entry-level kayaks for $750 each. Its variable cost is $500 per kayak. Fixed costs are $25,000 per month for volumes up to 1100 kayaks. Above 1100 kayaks, monthly fixed costs are $60,000. What is the budgeted operating income at a level of 2500 kayaks per month?

Energy Efficient Corporation provided the following partially completed monthly flexible budget. Complete the flexible budget.

Everyone Deserves to Smile mobile dentist office budgeted for 4305 patient visits a year. Everyone Deserves to Smile actually saw 4400 patients during the year and they have provided the following data: Based on the given information, what is the volume variance for personnel expenses?

Southern Instruments makes calculators for business applications. The budgeted selling price is $120 per calculator, the variable rate is $81 per calculator and budgeted fixed costs are $160,000 per month. What is the budgeted operating income for 16,000 calculators sold in a month?

Sitz Company makes chairs. The budgeted selling price is $55 per chair, the variable rate is $25 per chair and budgeted fixed costs are $20,000 per month. What is the budgeted operating income for 3100 chairs sold in a month?

An unfavorable flexible budget variance for variable expenses would indicate that:

Everyone Deserves to Smile mobile dentist office budgeted for 4325 patient visits a year. Everyone Deserves to Smile actually saw 4415 patients during the year and they have provided the following data: Based on the given information, what is the volume variance for revenue?

Everyone Deserves to Smile mobile dentist office budgeted for 4330 patient visits a year. Everyone Deserves to Smile actually saw 4415 patients during the year and they have provided the following data: Based on the given information, what is the flexible budget variance for personnel expenses?

A favorable flexible budget variance for variable expenses would indicate that:

Krazy Kayaks sells its entry-level kayaks for $650 each. Its variable cost is $300 per kayak. Fixed costs are $21,000 per month for volumes up to 1700 kayaks. Above 1700 kayaks, monthly fixed costs are $60,000. What is the budgeted operating income at a level of 400 kayaks per month?

An unfavorable volume variance for variable expenses would indicate that: