Boyne University offers an extensive continuing education program in many cities
ID: 2408942 • Letter: B
Question
Boyne University offers an extensive continuing education program in many cities throughout the state. For the convenience of its faculty and administrative staff and to save costs, the university operates a motor pool. The motor pool's monthly planning budget is based on operating 20 vehicles; however, for the month of March the university purchased one additional vehicle. The motor pool furnishes gasoline, oil, and other supplies for its automobiles. A mechanic does routine maintenance and minor repairs. Major repairs are performed at a nearby commercial garage The following cost control report shows actual operating costs for March of the current year compared to the planning budget for March. Boyne University Motor Pool Cost Control Report For the Month Ended March 31 March Actual Planning (Over) Under Budget 50,000 20 Budget Miles Autos Gasoline Oil, minor repairs, parts Outside repairs Insurance Salaries and benefits Vehicle depreciation Total 63,000 21 S 9,350 7,500 (1,850) (360) 80 2,360 1,420 2,120 7,540 5,250 2,000 1,500 2,000 7,540 (120) 250 28,0405,000 540 S2.500Explanation / Answer
Planning Budget assumption
Actual results
flexible budget = actual miles/autos * standard rate
Spending variance = actual -flexible budget
miles
63000
Autos
21
gasonline
0.15
per mile
9350
9450
-100
F
oil minor repair part
0.04
per mile
2360
2520
-160
F
outside repair
75
per automobile
1420
1575
-155
F
insurance
100
per automobile
2120
2100
20
U
salaries
7540
per month
7540
7540
0
no effect
vehicle depreciation
250
per automobile
5250
5250
0
no effect
total
28040
28435
-395
F
Planning Budget assumption
Actual results
flexible budget = actual miles/autos * standard rate
Spending variance = actual -flexible budget
miles
63000
Autos
21
gasonline
0.15
per mile
9350
9450
-100
F
oil minor repair part
0.04
per mile
2360
2520
-160
F
outside repair
75
per automobile
1420
1575
-155
F
insurance
100
per automobile
2120
2100
20
U
salaries
7540
per month
7540
7540
0
no effect
vehicle depreciation
250
per automobile
5250
5250
0
no effect
total
28040
28435
-395
F
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