Boyne University offers an extensve continuing education program In many cities

Question

Boyne University offers an extensve continuing education program In many cities throughout the state. For the conven ence of its faculty and administrative staff and to save costs, the unlvers ty operates a motor pool. The motor pool's monthly planning budget is based on operating 16 vehicles; however, for the month of March the university purchased one additional vehicle. The motor pool furn shes 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 Notor Pool Cost Control Report For the Month Ended March 31 over) March Planning Under ActualBudget Budget Miles 57,000 9,000 17 oil, minor repairs, parts Outside repairs 2,450 496 1,072 8,610 3,072 $25,319 23,540 2,785 670 1,190 8,610 3,264 335) 174) (118) Salaries and benefita Vchicle depreciation Total (192) 1,779 The planning budget was based on the tollowing assumptions: a. $0.16 per mile for gasoline. b. $005 per mile for oil, minor repairs, and parts C. $31 per automobile per month for outs de repairs. d. $67 per automobile per month for Insurance. e. $8,610 per month for salaries and benefits. t $192 per automobile per month for depreclation. The supervisor of the motor pool is unhappy with the report claiming it paints an unfair picture of the motor pool's Required: 1 Calculate the spending varlances for March. (Round "per mile answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable,-U" for unfavorable, and "None" for no effect (Le.. zero variance). Input all amounts as positive values.) e University MotorP Spending Variances r the Month Ended March 31 Oil, minor repairs, Outside repairs Insurance Salaries and Vehicle depreciation Total

Explanation / Answer

Calculate spending variance :

Gasoline 320 F Oil, Minor repairs,parts 65 F Outside repairs 143 U Insurance 51 U Salaries and benefits None Vehicle depreciation None Total 191 F

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