ACTG 131: Chapter 9 Quiz (solution with working)

Thomasson Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $36,290 per month plus $2,068 per flight plus $1 per passenger. The company expected its activity in April to be 89 flights and 239 passengers, but the actual activity was 88 flights and 244 passengers. The actual cost for plane operating costs in April was $211,040. The activity variance for plane operating costs in April would be closest to:

 

             $2,063 F

             $9,541 U

             $2,063 U

             $9,541 F

  

Sissac 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 $520 per month plus $101 per job plus $32 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 May to be 22 jobs and 132 meals, but the actual activity was 16 jobs and 139 meals. The actual cost for catering supplies in May was $6,350. The spending variance for catering supplies in May would be closest to:

 

             $616 F

             $616 U

             $234 F

             $234 U

 

Cadavieco Detailing’s cost formula for its materials and supplies is $2,030 per month plus $8 per vehicle. For the month of November, the company planned for activity of 98 vehicles, but the actual level of activity was 58 vehicles. The actual materials and supplies for the month was $2,760.

 

The materials and supplies in the planning budget for November would be closest to:

 

             $2,814

             $4,405

             $2,760

             $2,494

 

Cadavieco Detailing’s cost formula for its materials and supplies is $1,880 per month plus $7 per vehicle. For the month of November, the company planned for activity of 83 vehicles, but the actual level of activity was 48 vehicles. The actual materials and supplies for the month was $2,350.

 

The materials and supplies in the flexible budget for November would be closest to:

 

             $2,216

             $2,461

             $1,351

             $2,350

 

Cadavieco Detailing’s cost formula for its materials and supplies is $2,080 per month plus $14 per vehicle. For the month of November, the company planned for activity of 88 vehicles, but the actual level of activity was 48 vehicles. The actual materials and supplies for the month was $2,570.

 

The activity variance for materials and supplies in November would be closest to:

 

             $560 U

             $742 U

             $742 F

             $560 F