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 24 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. Miles Autos Gasoline Boyne University Motor Pool Cost Control Report For the Month Ended March 311 oil, minor repairs, parts Outside repaire Insurance Salaries and benefits Vehicle depreciation Total March Actual 58,400 25 $ 11,053 4,870 1,230 2,020 8,610 5,100 $ 32,883 Planning Budget 50,400 24 $ 10,080 4,536 1,056 1,896 8,610 4,896 $ 31,074 The planning budget was based on the following assumptions: (Over) Under Budget $ (973) (334) (174) (124) 0 (204) $ (1,809) b. $0.20 per mile for gasoline. b. $0.09 per mile for oil, minor repairs, and parts. E. $44 per automobile per month for outside repairs. d. $79 per automobile per month for insurance. e. $8,610 per month for salaries and benefits. t. $204 per automobile per month for depreciation. The supervisor of the motor pool is unhappy with the report, claiming it paints an unfair picture of the motor pool's performance.
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 24 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. Miles Autos Gasoline Boyne University Motor Pool Cost Control Report For the Month Ended March 311 oil, minor repairs, parts Outside repaire Insurance Salaries and benefits Vehicle depreciation Total March Actual 58,400 25 $ 11,053 4,870 1,230 2,020 8,610 5,100 $ 32,883 Planning Budget 50,400 24 $ 10,080 4,536 1,056 1,896 8,610 4,896 $ 31,074 The planning budget was based on the following assumptions: (Over) Under Budget $ (973) (334) (174) (124) 0 (204) $ (1,809) b. $0.20 per mile for gasoline. b. $0.09 per mile for oil, minor repairs, and parts. E. $44 per automobile per month for outside repairs. d. $79 per automobile per month for insurance. e. $8,610 per month for salaries and benefits. t. $204 per automobile per month for depreciation. The supervisor of the motor pool is unhappy with the report, claiming it paints an unfair picture of the motor pool's performance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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 24 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.
Miles
Autos
Gasoline
Boyne University Motor Pool
Cost Control Report
For the Month Ended March 311
oil, minor repairs, parts
Outside repaire
Insurance
Salaries and benefits
Vehicle depreciation
Total
March
Actual
58,400
25
$ 11,053
4,870
1,230
Planning
Budget
50,400
24
2,020
8,610
5,100
$ 32,883
$ 10,080
4,536
1,056
1,896
8,610
4,896
$ 31,074
The planning budget was based on the following assumptions:
b. $0.20 per mile for gasoline.
b. $0.09 per mile for oil, minor repairs, and parts.
E. $44 per automobile per month for outside repairs.
d. $79 per automobile per month for insurance.
(Over)
Under
Budget
$ (973)
(334)
(174)
(124)
0
(204)
$ (1,809)
e. $8,610 per month for salaries and benefits.
t. $204 per automobile per month for depreciation.
The supervisor of the motor pool is unhappy with the report, claiming it paints an unfair picture of the motor pool's performance.
Transcribed Image Text: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. Calculate the spending variances for March. (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
Spending Variances
For the Month Ended March 31
Gasoline
Oil, minor repairs, parts
Outside repairs
Insurance
Salaries and benefits
Vehicle depreciation
Total
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