man accounting questions

Milano

Pizza

is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made. Data concerning the pizzeria’s costs appear below:

Fixed Cost

Per Month

Cost per

Pizza

Delivery

Pizza ingredients

$

2.0

  Kitchen staff

$3,

82

0

  Utilities

$540

$0.05

  Delivery person

$2

.5

  Delivery vehicle

$

340

$1

.0

  Equipment depreciation

$19

0

  Rent

$1,780

  Miscellaneous

$810

In November, the pizzeria budgeted for 1,

250

pizzas at an average selling price of $16 per pizza and for 190 deliveries.

Data concerning the pizzeria’s operations in November appear below:

Actual

Results

  Pizzas

1,320

  Deliveries

150

  Revenue

$

18,500

$3,

285

$5,260

$1,000

$375

$530

$910

Required:

Prepare a flexible budget performance report that shows both activity variances and revenue and spending variances for the pizzeria for November. (Round your answers to the nearest dollar amount. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Omit the “$” sign in your response.)

Milano Pizza

Flexible

Budget

Performance Report

For the Month Ended November 30

Activity Variances

Revenue and Spending Variances

amount$

(Click to select)None Favorable

Unfavorable  

(Click to select)Favorable Unfavorable None      

  Expenses:

     Pizza ingredients

(Click to select)F U None      

(Click to select)FUNone  

     Kitchen staff

(Click to select)U F None      

(Click to select)FNoneU      

     Utilities

(Click to select)None F U      

     Delivery person

(Click to select)F None U      

(Click to select)NoneFU  

     Delivery vehicle

(Click to select)None F U      

(Click to select)UFNone  

     Equipment depreciation

(Click to select)None U F      

     Rent

(Click to select)U None F      

     Miscellaneous

(Click to select)F U None      

(Click to select)NoneUF      

  Total expense

  Net operating income

$   

(Click to select)None F U      

Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs:

Car Washed

  Cleaning supplies

$0.71

  Electricity

$1,050

$0.10

  Maintenance

$0.12

  Wages and salaries

$4,000

$0.15

  Depreciation

$5,8

70

$7,900

  Administrative expenses

$2,200

For example, electricity costs are $1,050 per month plus $.10 per car washed. The company actually washed 9,200 cars in August and collected an average of $5.70 per car washed.

Prepare the company’s flexible budget for August. (Input all amounts as positive values. Omit the “$” sign in your response.)

Lavage Rapide

Flexible Budget

For the Month Ended August 31

$ 

      Cleaning supplies

      Electricity

      Maintenance

      Wages and salaries

      Depreciation

      Rent

      Administrative expenses

$0.77

$1,010

$

3,500

$0.13

$5,

83

0

$3,900

For example, electricity costs are $1,010 per month plus $.10 per car washed. The company expects to wash 9,150 cars in August and to collect an average of $5.20 per car washed.

Prepare the company’s planning budget for August. (Round your answers to the nearest dollar amount. Input all amounts as positive values. Omit the “$” sign in your response.)

Planning Budget

For the Month Ended August 31

Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost drivers—the number of cruises and the number of passengers—that it uses in its budgeting and performance reports. The company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 80 passengers can be accommodated on the tour boat. Data concerning the company’s cost formulas appear below:

Cruise

Passenger

  Vessel operating costs

$3,700

$380

  Advertising

$1,660

  Administrative costs

$17

  Insurance

$2,250

For example, vessel operating costs should be $3,700 per month plus $380 per cruise plus $1 per passenger. The company’s sales should average $28 per passenger. The company’s planning budget for July is based on 25 cruises and 1,

57

0 passengers.

Prepare the company’s planning budget for July. (Input all amounts as positive values. Omit the “$” sign in your response.)

Alyeski Tours

Planning Budget

For the Month Ended July 31

      Vessel operating costs

      Advertising

      Administrative costs

      Insurance

Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below:

Vulcan Flyovers

Operating Data

For the Month Ended July 31

Planning

Budget

Flexible

Budget

Actual

Results

  Flights (q)

  Revenue ($323q)

$22,610

$18,411

$13,400

       Wages and salaries

($3,500 + $82q)

9,240

8,174

8,364

       Fuel

($21q)

1,470

1,197

1,247

       Airport fees

($631 + $37q)

3,221

2,740

1,950

       Aircraft depreciation

($5q)

350

       Office expenses

($188 + $1q)

258

245

14,539

12,641

12,131

$8,071

$5,770

$1,269

The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.

Prepare a flexible budget performance report for July. (Input all amounts as positive values. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “$” sign in your response.)

Flexible Budget Performance Report

For the Month Ended July 31

Activity Variances   

Revenue and Spending Variances  

(Click to select)Favorable Unfavorable None  

 $

 (Click to select)Favorable Unfavorable None   

(Click to select)FNoneU  

 (Click to select)FUNone   

 (Click to select)NoneFU   

 (Click to select)NoneUF   

(Click to select)UNoneF  

(Click to select)NoneUF  

 (Click to select)UFNone   

(Click to select)NoneFU  

(Click to select)UNoneF  

Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The company’s planning budget for July appears below:

Flight Café

Planning Budget
For the Month Ended July 31

  Budgeted meals (q)

18,800

  Revenue ($6.0q)

$112,800

      Raw materials

($1.55q)

29,140

      Wages and salaries ($4,400 + $.23q)

8,724

      Utilities

($1,600 + $.07q)

2,916

      Facility rent

($3,500)

      Insurance ($

2,100

)

      Miscellaneous

($640 + $.28q)

5,904

52,284

$60,516

In July, 18,500 meals were actually served. The company’s flexible budget for this level of activity appears below:

$111,000

28,675

8,655

2,895

5,820

51,645

$59,355

Prepare a report showing the company’s activity variances for July. (Leave no cells blank – be certain to enter “0” wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “$” sign in your response.)

Activity Variances

For the Month Ended July 31

  (Click to select)Unfavorable

None

Favorable   

  (Click to select)UFNone  

  (Click to select)NoneUF  

  (Click to select)FUNone  

  (Click to select)NoneFU  

(Click to select)UFNone  

  (Click to select)FNoneU  

  (Click to select)FUNone  

Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below:

Puget Sound Divers

Planning Budget

For the Month Ended May 31

  Budgeted diving-hours (q)

  Revenue ($367q)

$30,094

       Wages and salaries ($6,500 + $106q)

15,192

      Supplies

($2q)

164

      Equipment rental

($1,770 + $32q)

4,394

       Insurance ($

1,520

)

       Miscellaneous ($450 + $1q)

532

21,802

$8,292

During May, the company’s activity was actually 111 diving-hours. Prepare a flexible budget for that level of activity. (Input all amounts as positive values. Omit the “$” sign in your response.)

  Revenue ($3

68

q)

$30,544

       Wages and salaries ($7,100 + $122q)

17,226

       Supplies ($1q)

       Equipment rental ($1,760 + $13q)

2,839

       Insurance ($

2,580

)

       Miscellaneous ($610 + $1q)

693

23,421

$7,123

During May, the company’s activity was actually 106 diving-hours. Prepare a flexible budget for that level of activity. (Input all amounts as positive values. Omit the “$” sign in your response.)

19,800

  Revenue ($4.8q)

$95,040

      Raw materials ($2.25q)

44,550

      Wages and salaries ($3,500 + $.28q)

9,044

      Utilities (

$1,950

+ $.04q)

2,742

      Facility rent ($

4,200

)

      Insurance ($

2,150

)

      Miscellaneous ($530 + $.19q)

4,292

66,978

$28,062

In July,

19,700

meals were actually served. The company’s flexible budget for this level of activity appears below:

$94,560

44,325

9,016

2,738

4,273

66,702

$27,858

  (Click to select)Favorable

None

Unfavorable  

  (Click to select)UNoneF  

  (Click to select)NoneFU  

  Revenue ($324q)

$22,032

$18,468

$14,500

       Wages and salaries ($2,800 + $77q)

8,036

7,189

7,299

       Fuel ($19q)

1,292

1,083

1,133

       Airport fees ($649 + $37q)

3,165

2,758

       Office expenses ($182 + $1q)

239

399

13,083

11,554

11,066

$8,949

$6,914

$3,434

(Click to select)None

Favorable

Unfavorable  

(Click to select)Unfavorable

None

Favorable   

 (Click to select)NoneFU   

$4,700

$350

$1,530

$3,200

For example, vessel operating costs should be $4,700 per month plus $350 per cruise plus $2 per passenger. The company’s sales should average $30 per passenger. The company’s planning budget for July is based on 25 cruises and 1,500 passengers.

$1,070

$4,600

$0.20

$5,950

$3,800

For example, electricity costs are $1,070 per month plus $.10 per car washed. The company expects to wash 9,080 cars in August and to collect an average of $5.40 per car washed.

$0.75

$1,140

$4,300

$0.17

$5,920

$3,300

For example, electricity costs are $1,140 per month plus $.10 per car washed. The company actually washed 10,100 cars in August and collected an average of $4.50 per car washed.

$2.4

$3,520

$460

$1.8

$470

$210

$1,690

$630

In November, the pizzeria budgeted for 1,290 pizzas at an average selling price of $17 per pizza and for 180 deliveries.

1,460

160

$17,000

$4,385

$5,400

$900

$288

$680

$940

(Click to select)Favorable

None

Unfavorable      

Favorable      

(Click to select)UNoneF