Capelli Hospital bases its budgets on patient-visits. The hospital's static budget for August appears below:

Capelli Hospital bases its budgets on patient-visits. The hospital's static budget for August appears below:

	Budgeted number of patient-visits............	8,300
	Budgeted variable overhead costs:
	Supplies (@$5.00 per patient-visit).......	$ 41,500
	Laundry (@$7.30 per patient-visit).......	60,590
	Total variable overhead cost.....................	102,090
	Budgeted fixed overhead costs:
	Wages and salaries.................................	60,590
	Occupancy costs.....................................	73,040
	Total fixed overhead cost..........................	133,630
	Total budgeted overhead cost....................	$235,720

      65. The total variable overhead cost at an activity level of 9,300 patient-visits per month should be:

            A)      $114,390

            B)      $149,730

            C)      $102,090

            D)      $133,630

           

            Ans:  A    

            Solution:

           

            Budgeted number of patient-visits: 8,300

		Cost Formula (per patient-visit)	Activity (in patient-visits):  9,300
	Variable overhead costs:
	Supplies.................................................	$  5.00	$  46,500
	Laundry.................................................	7.30	67,890
	Total variable overhead cost.....................	$12.30	$114,390

      66. The total fixed overhead cost at an activity level of 9,600 patient-visits per month should be:

            A)      $133,630

            B)      $154,560

            C)      $235,720

            D)      $272,640

           

            Ans:  A    

            Solution:

           

            Budgeted number of patient-visits: 9,600

		Activity (in patient-visits):  9,300
	Fixed overhead costs:
	Wages and salaries.................................	$  60,590
	Occupancy costs.....................................	73,040
	Total fixed overhead cost..........................	$133,630

      67. The total overhead cost at an activity level of 9,400 patient-visits per month should be:

            A)      $235,720

            B)      $249,250

            C)      $266,960

            D)      $250,640

           

            Ans:  B    

            Solution:

           

            Budgeted number of patient-visits: 8,300

		Cost Formula (per patient-visit)	Activity (in patient visits): 9,400
	Overhead Costs
	Variable overhead costs:
	Supplies.................................................	$  5.00	$  47,000
	Laundry.................................................	7.30	68,620
	Total variable overhead cost.....................	$12.30	115,620
	Fixed overhead costs:
	Wages and salaries................................		60,590
	Occupancy costs....................................		73,040
	Total fixed overhead cost.........................		133,630
	Total overhead cost...................................		$249,250

Use the following to answer questions 68-70:

Mandalay Hotel bases its budgets on guest-days. The hotel's static budget for August appears below:

	Budgeted number of guest-days................	4,300
	Budgeted variable overhead costs:
	Supplies (@$9.60 per guest-day)...........	$ 41,280
	Laundry (@$9.40 per guest-day)...........	40,420
	Total variable overhead cost.....................	81,700
	Budgeted fixed overhead costs:
	Wages and salaries.................................	57,190
	Occupancy costs.....................................	52,030
	Total fixed overhead cost..........................	109,220
	Total budgeted overhead cost....................	$190,920

      68. The total variable overhead cost at an activity level of 5,000 guest-days per month should be:

            A)      $127,000

            B)      $109,220

            C)      $95,000

            D)      $81,700

           

            Ans:  C    

            Solution:

            Budgeted number of guest-days: 4,300

		Cost Formula (per guest-days)	Activity (in guest-days): 5,000
	Variable overhead costs:
	Supplies.................................................	$  9.60	$48,000
	Laundry.................................................	9.40	47,000
	Total variable overhead cost.....................	$19.00	$95,000

      69. The total fixed overhead cost at an activity level of 5,500 guest-days per month should be:

            A)      $139,700

            B)      $190,920

            C)      $244,200

            D)      $109,220

           

            Ans:  D    

            Solution:

           

            Budgeted number of guest-days: 4,300

		Activity (in guest-days): 5,500
	Fixed overhead costs:
	Wages and salaries.................................	$  57,190
	Occupancy costs.....................................	52,030
	Total fixed overhead cost..........................	$109,220

      70. The total overhead cost at an activity level of 5,200 guest-days per month should be:

            A)      $208,020

            B)      $230,880

            C)      $209,940

            D)      $190,920

           

            Ans:  A    

            Solution:

           

            Budgeted number of guest-days: 4,300

		Cost Formula (per guest-days)	Activity (in guest-days): 5,200
	Overhead Costs
	Variable overhead costs:
	Supplies.................................................	$  9.60	$  49,920
	Laundry.................................................	9.40	48,880
	Total variable overhead cost.....................	$19.00	98,800
	Fixed overhead costs:
	Wages and salaries................................		57,190
	Occupancy costs....................................		52,030
	Total fixed overhead cost.........................		109,220
	Total overhead cost...................................		$208,020

Use the following to answer questions 71-73:

Isadore Hospital bases its budgets on patient-visits. The hospital's static budget for July appears below:

	Budgeted number of patient-visits............	7,700
	Budgeted variable overhead costs:
	Supplies (@ $4.60 per patient-visit)......	$ 35,420
	Laundry (@ $7.20 per patient-visit).......	55,440
	Total variable overhead cost.....................	90,860
	Budgeted fixed overhead costs:
	Salaries...................................................	46,200
	Occupancy costs.....................................	67,760
	Total fixed overhead cost..........................	113,960
	Total budgeted overhead cost....................	$204,820
	Actual results for the month were:
	Actual number of patient-visits..............	7,800
	Supplies..................................................	$38,250
	Laundry..................................................	$61,240
	Salaries...................................................	$46,190
	Occupancy costs.....................................	$65,650

      71. The variance for supplies costs in the flexible budget performance report for the month is:

            A)      $2,370 U

            B)      $2,370 F

            C)      $2,830 F

            D)      $2,830 U

           

            Ans:  A    

            Solution:

           

            Budgeted number of patient-visits: 7,700

Actual number of patient-visits: 7,800

		Cost Formula (per patient-visit)	Actual Costs Incurred for 7,800 patient-visits	Budget Based on 7,800 patient-visits	Variance
	Variable overhead costs (Supplies)....	$4.60	$38,250	$35,880	$2,370 U

      72. The variance for laundry costs in the flexible budget performance report for the month is:

            A)      $5,080 F

            B)      $5,080 U

            C)      $5,800 U

            D)      $5,800 F

           

            Ans:  B    

            Solution:

           

            Budgeted number of patient-visits: 7,700

Actual number of patient-visits: 7,800

		Cost Formula (per patient-visit)	Actual Costs Incurred for 7,800 patient-visits	Budget Based on 7,800 patient-visits	Variance
	Variable overhead costs (Laundry)..	$7.20	$61,240	$56,160	$5,080 U

      73. The variance for occupancy costs in the flexible budget performance report for the month is:

            A)      $2,110 U

            B)      $2,990 U

            C)      $2,990 F

            D)      $2,110 F

           

            Ans:  D    

            Solution:

           

            Budgeted number of patient-visits: 7,700

Actual number of patient-visits: 7,800

		Actual Costs Incurred for 7,800 patient-visits	Budget Based on 7,800 patient-visits	Variance
	Fixed overhead costs  (Occupancy costs)	$65,650	$67,760	$2,110 F