Mapletide: More Inspection Hours, Less Revenue — سؤال دراسة حالة في المحاسب الإداري المعتمد

The case

Mapletide provides engineering inspections to commercial property owners. Team leaders negotiate hourly fees within approved limits. At the start of the year, Mapletide budgeted 7,200 billable hours at an average fee of $180 per hour. Actual activity was 7,500 billable hours at an average fee of $172.

Budgeted variable operating cost was $36 per billable hour. Actual variable operating cost was $277,500. Managers are investigating why increased billable activity did not produce the planned revenue.

Assumptions

Use billable hours as the sole activity driver; mix effects are outside this case.
Original prices and cost rates remain the standards when constructing the flexible budget.
Revenue variances are actual minus budget: positive is favorable and negative is unfavorable.
Expense variances are actual minus budget: positive is unfavorable and negative is favorable.
All expense questions concern variable costs only and remain within the relevant range.

What is Mapletide's actual revenue variance from its original annual revenue budget?

Answer $54,000 favorable $60,000 unfavorable $6,000 unfavorable $6,000 favorable

The original-to-actual revenue comparison includes both fee and Other effect in the static variance effects. A flexible budget substitutes actual Variable updated in the flexible budget while retaining the original fee. Mapletide's flexible budget revenue variance is Flexible budget revenue variance , attributable to its Source of the flexible revenue variance .

In a separate scenario, suppose Mapletide billed exactly 7,200 hours but still earned an average fee of $172 rather than the $180 standard. What would the flexible budget revenue variance be? Enter whole dollars rounded to the nearest dollar; positive means favorable and negative means unfavorable.

Answer USD

A whole number. A negative amount may be written with a minus sign or in brackets.

Using the actual annual results in the scenario, calculate Mapletide's revenue volume variance (the change in billable hours valued at the budgeted fee). Enter whole dollars rounded to the nearest dollar; positive means favorable and negative means unfavorable.

Answer USD

A whole number. A negative amount may be written with a minus sign or in brackets.

Calculate actual variable operating cost minus the original static variable cost budget. Enter whole dollars rounded to the nearest dollar; use positive for unfavorable cost and negative for favorable cost.

Answer USD

A whole number. A negative amount may be written with a minus sign or in brackets.

Which TWO statements correctly explain Mapletide's actual variable cost results? Select exactly TWO.

Select two answers. Selected 0 / 2

Answer All of the unfavorable static cost variance proves inefficient spending. Actual variable cost per hour was $37, above the $36 budgeted rate. The flexible budget cost variance was zero because billable hours increased. The static cost variance combines an unfavorable volume effect of 300 extra hours at $36 with an unfavorable spending effect of $1 per hour on 7,500 hours. A revenue volume increase requires a favorable variable cost volume variance.

Why is a flexible budget especially useful in Mapletide's review of team leaders?

Answer It replaces the original standard fee with the actual fee, removing unfavorable revenue reports. It replaces the budgeted variable cost per hour with the actual rate so the spending benchmark reflects current results. It values the change in billable-hour volume using the actual hourly fee, isolating the amount caused by activity alone. It compares results at the actual hour level, helping distinguish negotiated fee and spending performance from activity differences.

The marks, the correct answers and the explanations appear as soon as the answers are submitted. Unanswered questions earn no marks.

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