Last year the price for thermometer covers in a pediatrician’s office was $.05 each. This year, the covers cost $.06 each. If the office purchased 10,000 thermometer covers this year, what is the price variance?
2. Using the information in the table below, calculate the amount of the favorable price variance.
| Budgeted | Actual | |
| Volume | 200,000 | 190,000 |
| Cost per unit | $40 | $37 |
| Cost | $8,000,000 | $7,030,000 |
Short Answer Problems (1 @ 10 = 10)
3. When would it make sense to use a flexible budget as compared to a forecast budget?
Multiple Choice Problems (4 @ 5 = 20)
4. ________________ is a phase of management that is longer than budgeting, but shorter than planning.
A. Programming
B. Accounting
C. Operating
D. None of the above
5. Budgets normally cover a period of:
A. 5 years
B. 2 years
C. 3 years
D. 1 year
6. Which of the following is part of a statistics budget?
A. Output expectations
B. Responsibility for estimation
C. Estimation methodology
D. All of the above
7. The following is an example of a _____________ budget:
“The budget for the radiology department is different at 90 percent occupancy than at 80 percent occupancy.”
A. rolling
B. flexible
C. forecast
D. fixed
