Case 9-25 (Algo) Critiquing a Report; Calculating Spending Variances [LO9-3, LO9-5] 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 21 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 31 Oil, minor repairs, parts Outside repairs Insurance Salaries and benefits Vehicle depreciation Total March Actual 56,700 22 $ 10,220 4,230 765 1,465 8,610 4,158 $ 29,448 Planning Budget 48,700 21 $ 9,253 3,896 588 1,344 8,610 3,969 $ 27,660 (Over) Under Budget The planning budget was based on the following assumptions: a. $0.19 per mile for gasoline. o. $0.08 per mile for oil, minor repairs, and parts. c. $28 per automobile per month for outside repairs. d. $64 per automobile per month for insurance. e. $8,610 per month for salaries and benefits. f. $189 per automobile per month for depreciation. $ (967) (334) (177) (121) 0 (189) $ (1,788) The supervisor of the motor pool is unhappy with the report, claiming it paints an unfair picture of the motor pool's performance.
Case 9-25 (Algo) Critiquing a Report; Calculating Spending Variances [LO9-3, LO9-5] 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 21 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 31 Oil, minor repairs, parts Outside repairs Insurance Salaries and benefits Vehicle depreciation Total March Actual 56,700 22 $ 10,220 4,230 765 1,465 8,610 4,158 $ 29,448 Planning Budget 48,700 21 $ 9,253 3,896 588 1,344 8,610 3,969 $ 27,660 (Over) Under Budget The planning budget was based on the following assumptions: a. $0.19 per mile for gasoline. o. $0.08 per mile for oil, minor repairs, and parts. c. $28 per automobile per month for outside repairs. d. $64 per automobile per month for insurance. e. $8,610 per month for salaries and benefits. f. $189 per automobile per month for depreciation. $ (967) (334) (177) (121) 0 (189) $ (1,788) The supervisor of the motor pool is unhappy with the report, claiming it paints an unfair picture of the motor pool's performance.
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![Case 9-25 (Algo) Critiquing a Report; Calculating Spending Variances [LO9-3, LO9-5]
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 21 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 31
Oil, minor repairs, parts
Outside repairs
Insurance
Salaries and benefits
Vehicle depreciation
Total
March Actual
56,700
22
$ 10,220
4,230
765
1,465
8,610
4,158
$ 29,448
Gasoline
Oil, minor repairs, parts
Outside repairs
Insurance
Salaries and benefits
Vehicle depreciation
Total
Planning (Over) Under
Budget
Budget
48,700
The planning budget was based on the following assumptions:
d. $64 per automobile per month for insurance.
e. $8,610 per month for salaries and benefits.
f. $189 per automobile per month for depreciation.
21
$ 9,253
3,896
588
1,344
8,610
3,969
$ 27,660
a. $0.19 per mile for gasoline.
b. $0.08 per mile for oil, minor repairs, and parts.
c. $28 per automobile per month for outside repairs.
Boyne University Motor Pool
Spending Variances
For the Month Ended March 31
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.)
$ (967)
(334)
(177)
(121)
0
(189)
$ (1,788)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F37090eef-025f-4619-bebd-91b936ece1eb%2F5a952466-8af8-46a1-9b8c-4e946197bb75%2Fwg9szn7_processed.png&w=3840&q=75)
Transcribed Image Text:Case 9-25 (Algo) Critiquing a Report; Calculating Spending Variances [LO9-3, LO9-5]
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 21 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 31
Oil, minor repairs, parts
Outside repairs
Insurance
Salaries and benefits
Vehicle depreciation
Total
March Actual
56,700
22
$ 10,220
4,230
765
1,465
8,610
4,158
$ 29,448
Gasoline
Oil, minor repairs, parts
Outside repairs
Insurance
Salaries and benefits
Vehicle depreciation
Total
Planning (Over) Under
Budget
Budget
48,700
The planning budget was based on the following assumptions:
d. $64 per automobile per month for insurance.
e. $8,610 per month for salaries and benefits.
f. $189 per automobile per month for depreciation.
21
$ 9,253
3,896
588
1,344
8,610
3,969
$ 27,660
a. $0.19 per mile for gasoline.
b. $0.08 per mile for oil, minor repairs, and parts.
c. $28 per automobile per month for outside repairs.
Boyne University Motor Pool
Spending Variances
For the Month Ended March 31
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.)
$ (967)
(334)
(177)
(121)
0
(189)
$ (1,788)
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