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# EXAM 8 - EXAM 8 1 Naval Catering uses two measures of...

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EXAM 8 1. Naval Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is \$430 per month plus \$99 per job plus \$10 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in March to be 12 jobs and 126 meals, but the actual activity was 9 jobs and 124 meals. The actual cost for catering supplies in March was \$2,550. The catering supplies in the planning budget for March would be closest to: A) \$3,400 B) \$2,561 C) \$2,550 D) \$2,878 Feedback: \$430 + \$99 x 12 + \$10 x 126 = \$2,878 Points Earned: 0.0/1.0 Correct Answer(s): D 2. Laboe 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 2,900 tenant-days, but its actual level of activity was 2,940 tenant-days. The kennel has provided the following data concerning the formulas to be used in its budgeting: The net operating income in the planning budget for February would be closest to: A) \$7,191 B) \$7,391 C) \$7,900 D) \$8,260 Feedback:

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Points Earned: 0.0/1.0 Correct Answer(s): C 3. Harville Midwifery's cost formula for its wages and salaries is \$1,610 per month plus \$199 per birth. For the month of March, the company planned for activity of 118 births, but the actual level of activity was 122 births. The actual wages and salaries for the month was \$25,430. The spending variance for wages and salaries in March would be closest to: A) \$458 F B) \$338 U C) \$458 U D) \$338 F Feedback: Since the actual expense is less than the flexible budget, the variance is favorable (F) Points Earned: 0.0/1.0 Correct Answer(s): A 4. Mah Clinic uses client-visits as its measure of activity. During April, the clinic budgeted for 3,800 client-visits, but its actual level of activity was 3,750 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: The medical supplies in the flexible budget for April would be closest to: A) \$21,340 B) \$22,600 C) \$22,325 D) \$21,913
Feedback: \$1,700 + \$5.50 x 3,750 = \$22,325 Points Earned: 0.0/1.0 Correct Answer(s): C 5. Feiner Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,220 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: The activity variance for net operating income in December would be closest to: A) \$690 U B) \$9,670 U C) \$690 F D) \$9,670 F Feedback: Since the flexible budget net operating income is greater than the planning budget, the variance is favorable (F) Points Earned: 0.0/1.0 Correct Answer(s): C 6. Guilbault Midwifery's cost formula for its wages and salaries is \$2,340 per month plus

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EXAM 8 - EXAM 8 1 Naval Catering uses two measures of...

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