Boyne University offers an extensive continuing education program in many cities

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 poo The motor pool's monthly planning budget is based on operating 17 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 58, 800 18 Planning Budget 50,800 (Over) Under Budget Miles Autos 17 13,165 12,192 (973) 6,604 Gasoline Oil, minor repairs, parts Outside repairs Insurance Salaries and benefits Vehicle depreciation Total 6,940 990 1,530 8,610 3,744 (336) (174) (119) 816 1,411 8,610 3,536 34,979 33,169 (1,810) 208

Explanation / Answer

Flexible budget a) Gasoline 58,800*.24 = 14112 b) oil,minor repairs =58800*.13= 7644 c) outsider repairs 18*48= 864 d) insurance 18*83= 1494 f) Depreciation 18*208= 3744 Spending variance Actual Flexible Spending variance budget budget Gasoline 13,165 14112 947 F Oil,minor repairs,parts 6,940 7644 704 F Outside repairs 990 864 126 U Insurance 1,530 1494 36 U Salaries and benefits 8,610 8,610 0 N Vehicle Depreciation 3,744 3744 0 N total 34,979 36468 1,489 F

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