Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 24 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 58,400 50,400
Autos 25 24
Gasoline $ 11,053 $ 10,080 $ (973 )
Oil, minor repairs, parts 4,870 4,536 (334 )
Outside repairs 1,230 1,056 (174 )
Insurance 2,020 1,896 (124 )
Salaries and benefits 8,610 8,610 0
Vehicle depreciation 5,100 4,896 (204 )
Total $ 32,883 $ 31,074 $ (1,809 )

The planning budget was based on the following assumptions:
a. $0.20 per mile for gasoline.
b. $0.09 per mile for oil, minor repairs, and parts.
c. $44 per automobile per month for outside repairs.
d. $79 per automobile per month for insurance.
e. $8,610 per month for salaries and benefits.
f. $204 per automobile per month for depreciation.

The supervisor of the motor pool is unhappy with the report, claiming it paints an unfair picture of the motor pools performance.

image text in transcribed

Required: 1. Complete the performance report for March based on a flexible budget that shows spending variances (Round "per mile" answers to 2 decimal places. 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.) Boyne University Motor Pool Spending Variances For the Month Ended March 31 Planning Budget Flexible Actual Spending Variances Budget Assumptions Results 58,400 Miles Autos 11,053 per mile Gasoline 4,870 per mile Oil, minor repairs, parts Outside repairs per automobile 1,230 2,020 Insurance per automobile 8,610 Salaries and benefits per month 5,100 Vehicle depreciation per automobile 32,883 Total

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of External Auditing

Authors: Brenda Porter, Jon Simon, David Hatherly

1st Edition

0471962120, 978-0471962120

More Books

Students also viewed these Accounting questions

Question

3. Identify the methods used within each of the three approaches.

Answered: 1 week ago