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 univer$-$ sity operates a motor pool. The motor pool$$s monthly planning budget is based on operating $20$ 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.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 univer$-$

sity operates a motor pool. The motor pool's monthly planning budget is based on operating $20$

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.

Flexible Budgets and Performance Analysis

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:

a$.$ $$0\mathrm{.}15$ per mile for gasoline.

b$.$ $$0\mathrm{.}04$ per mile for oil, minor repairs, and parts.

c$.$ $$75$ per automobile per month for outside repairs.

d$.$ $$100$ per automobile per month for insurance.

e$.$ $$7,540$ per month for salaries and benefits.

f$.$ $$250$ per automobile per month for depreciation.

The supervisor of the motor pool is unhappy with the report, claiming it paints an unfair pic$-$

ture of the motor pool's performance.

Required:

Prepare a new performance report for March based on a flexible budget that shows spending

variances.

What are the deficiencies in the original cost control report? How does the report that you

prepared in part $(1)$ above overcome these deficiencies?