8-41 Flexible Budgeting e of its reporters and staff based in London, CNN operates a motor pool. The ted with 25 vehicles until February of this year, when it acquired an additional auto- Ppool furnishes petrol (gasoline), oil, and other supplies for the cars and hires one mobile. I ieho does routine maintenance and minor repairs. Major repairs are done at a nearby com- mercial garage. A supervisor manages the operations meria h year the supervisor prepares an operating budget, informing CNN management of the funds nceded to operate the pool. Depreciation on the automobiles is recorded in the budget in order to determine the cost per mile. The following schedule presents the annual budget approved by the news division. The actual ts for March are compared with one-twelfth of the annual budget. cos CNN London Motor Pool Budget Report for March 20x1 Annual One-Month March Over Budgetillid BudgetActual(Under) E1,325 40 (175) 16 82,500 30,000 2,700 4,800 21,600 6.875 2,500 225 400 ,800 8,200 Petrol (gasoline) Oil, minor repairs, parts, and supplies Outside repairs Insurance Salaries and benefits Depreciation Total costs 2,540 50 416 1,800 22.8001.9001.976 E14,982 40,000 1070 26 76 EI,282 ox0 E13.700 25,000 E1096 25 E164,400 1,500,000 E 1096 25 Total kilometers Cost per kilometer Number of automobiles