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 pool. The motor pool’s monthly planning budget is based on operating 23 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.

  

The planning budget was based on the following assumptions:

The supervisor of the motor pool is unhappy with the report, claiming it paints an unfair picture of the motor pool’s performance.

Required:

1. Complete the performance report for March based on a flexible budget that shows spending variances. (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 (i.e., zero variance). Input all amounts as positive values.)

Boyne University Motor Pool
Cost Control Report
For the Month Ended March 31 March
Actual Planning
Budget (Over) Under Budget Miles 57,600 49,600 Autos 24 23 Gasoline $ 7,400 $ 6,448 $ (952 ) Oil, minor repairs, parts 6,780 6,448 (332 ) Outside repairs 1,030 851 179 Insurance 1,800 1,679 (121 ) Salaries and benefits 8,610 8,610 0 Vehicle depreciation 4,752 4,554 (198 ) Total $ 30,372 $ 28,590 $ (1,782 )

Explanation / Answer

March Flexible (over)under Actual budget miles 57,600 57,600 autos 24 24 Gasoline 7,400 7488 88 oil,minor repairs,parts 6,780 7488 708 outside repair 1,030 888 -142 insurance 1,800 1752 -48 salaries and benefits 8,610 8,610 0 vechicle depreciation 4,752 4,554 -198 total 30,372 30780 408

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