a. UNDERWATER UNIVERSITY Variable Costing Income Statement For the Fall 2016 Term Rate x Quantity credit hours Revenue Vanable costs: Regis., records, and marketing Instructional costs Total variable costs Contribution margin Depreciation on classrooms and equipment Income from operations students credit hours 3 4 26 27 UNDERWATER UNIVERSITY Contribution Margin Analysis For the Fall 2016 Term 28 b. 29 30 31 32 33 34 35 36 37 38 39 Planned contribution margin Effect of change in revenue Revenue quantity factor Unit price factor Total effect of change in revenue Effect of changes in registration, records, and marketing costs: Variable cost quantity factor Unit cost factors Total effect of changes in regis., records, and marketing Effect of changes in instructional costs Variable cost quantity factor Unt Cost factor Total effect of changes in instructional costs Actual contribution margin Ex. 20(5)-22 40 41 42 43 44 45 Ready Type here to search M J G K E F H m D Actual contribution margin Difference in credit hours Planned tuition per credit hour Revenue quantity factor b Difference in price x Actual credit hours Unit price factor Difference in number of students x Planned reg. records and marketing per student Variable cost quantity factor + Difference in reg., records, and mkting per student x Actual enrollment Unit cost factor Difference in credit hours x Planned instructional cost per hour Vanable cost quantity factor 1 Difference in instructional costs per hour * Actual credit hours Variable cost quantity factor EX 5-22 Variable costing income statement and contribution margin analysis for a service company OBJ. 5,6 The actual and planned data for Underwater University for the Fall term 2016 were as follows: Actual Planned Enrollment Tuition per credit hour Credit hours Registration, records, and marketing cost per enrolled student Instructional costs per credit hour Depreciation on classrooms and equipment 4,500 $120 60,450 $275 $64 $825,600 4,125 $135 43,200 $275 $60 $825,600 Registration, records, and marketing costs vary by the number of enrolled students, while instructional costs vary by the number of credit hours. Depreciation is a fixed cost. a. Prepare a variable costing income statement showing the contribution margin and income from operations for the Fall 2016 term. b. Prepare a contribution margin analysis report comparing planned with actual perfor- mance for the Fall 2016 term