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Freeway Driving School offers driving lessons. The school's owner and manager has been attempting to evaluate performance and control costs using a variance report that
Freeway Driving School offers driving lessons. The school's owner and manager has been attempting to evaluate performance and control costs using a variance report that compares the planning budget to actual results. The school performed 175 lessons but had planned on only 170 for the month of June. Management has provided the below revenue and cost standards and the actual June results. ferenue and EXpense Fixed Variable elementelement per er month Revenue Faci Administration Freeway Driving School Income Statement For the Month Ended 175 Actual Lessons Hevenue nstructor 10,870 730 Facility Expenses Administration otal expense 1,870 Req a: If the school performed 175 lessons but had planned on only 170, is management's comparison of actual results to the planning budget an appropriate comparison. Why or why not? Req b:Using the information above, prepare a report showing the revenue and spending variances for each of the line items on the June income statement. Label each variance as favorable (F) or unfavorable [U.Be sure to calculate and label the total expense and total income variances
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