Accounting

Critique a Variance Report [LO6]     Refer to the data for The Exterminator Inc. in Exercise 9–6. A management intern has suggested that the budgeted revenues and costs should be adjusted for the actual level of activity in May before they are compared to the actual revenues and costs. Because the actual level of […]

  Analyze a Performance Report [LO6]     The Exterminator Inc. provides on-site residential pest extermination services. The company has several mobile teams who are dispatched from a central location in company-owned trucks. The company uses the number of jobs to measure activity. At the beginning of May, the companybudgeted for 200 jobs, but the

Prepare a Flexible Budget with More Than One Cost Driver [LO5]   Icicle Bay Tours operates day tours of coastal glaciers in Alaska on its tour boat the Emerald 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

Prepare a Flexible Budget Performance Report [LO4]     Mt. Hood Air offers scenic overflights of Mt. Hood and the Columbia River gorge. Data concerning the company’s operations in August appear below:   The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for

Prepare a Report Showing Revenue and Spending Variances [LO3]   Olympia Bivalve farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,000 pounds of oysters in July. The company’s flexible budget for July appears below:   The actual results for July appear below:   Required: Prepare a report showing the company’s

Prepare a Report Showing Activity Variances [LO2] Air Meals 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 December appears below:   In December, 21,000 meals were actually served. The company’s flexible budget for this level of activity is as follows:

All applicable exercises are available with McGraw-Hill’s Connect™ Accounting. EXERCISE 9–1 Prepare a Flexible Budget [LO1] Gator Divers is a company that provides diving services such as underwater ship repairs to clients in the Tampa Bay area. The company’s planning budget for March appears below:   Required: During March, the company’s activity was actually 190 diving-hours.

Available with McGraw-Hill’s Connect™ Accounting. LEARNING OBJECTIVES 1, 2, 3, 4 The Excel worksheet form that appears on the next page is to be used to recreate the Review Problem on pages 398–399. Download the workbook containing this form from the Online Learning Center at  www.mhhe.com/garrison14e . On the website you will also receive instructions about how to use

Questions · 9–1 What is a static planning budget? · 9–2 What is a flexible budget and how does it differ from a static planning budget? · 9–3 What are some of the possible reasons that actual results may differ from what had been budgeted at the beginning of a period? · 9–4 Why is it difficult to interpret

Revenue variance The difference between how much the revenue should have been, given the actual level of activity, and the actual revenue for the period. A favorable (unfavorable) revenue variance occurs because the revenue is higher (lower) than expected, given the actual level of activity for the period. (p. 390) Spending variance The difference between