Practice problems for test 2 chapter 9 - Tagged PDF

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Practice problems for ch 9 accounting 208 with Debra dragone...

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Chapter 9 Practice Problems. 1) Magliacane Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed Element per Month Revenue Employee salaries and wages Travel expenses Other expenses

$

58,100

$

31,900

Variable Element per Customer Served $ 4,300 $ 1,200 $ 700

When the company prepared its planning budget at the beginning of February, it assumed that 39 customers would have been served. However, 35 customers were actually served during February. The revenue in the company's flexible budget for February would have been closest to: A) $170,709 B) $167,700 C) $153,200 D) $150,500 2) Picozzi Snow Removal's cost formula for its vehicle operating cost is $2,060 per month plus $306 per snow-day. For the month of January, the company planned for activity of 16 snowdays, but the actual level of activity was 18 snow-days. The actual vehicle operating cost for the month was $7,720. The vehicle operating cost in the planning budget for January would be closest to: A) $6,956 B) $6,862 C) $7,720 D) $7,568

3) Loughry 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 $530 per month plus $114 per job plus $16 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 October to be 25 jobs and 234 meals, but the actual activity was 20 jobs and 233 meals. The actual cost for catering supplies in October was $6,600. The catering supplies in the flexible budget for October would be closest to: A) $6,600 B) $5,699 C) $6,538 D) $7,124 4) Petrus Framing's cost formula for its supplies cost is $2,300 per month plus $6 per frame. For the month of March, the company planned for activity of 861 frames, but the actual level of activity was 856 frames. The actual supplies cost for the month was $7,790. The activity variance for supplies cost in March would be closest to: A) $324 U B) $30 F C) $324 F D) $30 U 5) Dermody Snow Removal's cost formula for its vehicle operating cost is $2,850 per month plus $317 per snow-day. For the month of December, the company planned for activity of 16 snow-days, but the actual level of activity was 14 snow-days. The actual vehicle operating cost for the month was $7,640. The spending variance for vehicle operating cost in December would be closest to: A) $282 U B) $282 F C) $352 U D) $352 F 6) In a flexible budget, when the activity declines, the total variable cost also declines. A) True B) False 8) A budget that is based on the actual activity of a period is known as a: A) continuous budget. B) flexible budget. C) static budget. D) master budget....