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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

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 pools monthly planning budget is based on operating 22 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.

Boyne University Motor Pool Cost Control Report For the Month Ended March 31
March Actual Planning Budget (Over) Under Budget
Miles 56,600 48,600
Autos 23 22
Gasoline $ 10,670 $ 9,720 $ (950)
Oil, minor repairs, parts 4,710 4,374 (336)
Outside repairs 770 594 (176)
Insurance 1,510 1,386 (124)
Salaries and benefits 8,610 8,610 0
Vehicle depreciation 4,324 4,136 (188)
Total $ 30,594 $ 28,820 $ (1,774)

The planning budget was based on the following assumptions:

  1. $0.20 per mile for gasoline.
  2. $0.09 per mile for oil, minor repairs, and parts.
  3. $27 per automobile per month for outside repairs.
  4. $63 per automobile per month for insurance.
  5. $8,610 per month for salaries and benefits.
  6. $188 per automobile per month for depreciation.

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