Vishu Boyne University offers an extensive continuing education program in many cities throughout the state. For the convenience of itsfaculty and administrative staff and to save costs, the university operates a motor pool. The motor pool's monthly planning budget isbased on operating 15 vehicles; however, for the month of March the university purchased one additional vehicle. The motor poolfurnishes gasoline, oil, and other supplies for its automobiles. A mechanic does routine maintenance and minor repairs. Major repairsare 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 forMarch.MilesAutosGasolineBoyne University Motor PoolCost Control Report.For the Month Ended March 31Oil, minor repairs, partsOutside repairsInsuranceSalaries and benefits.Vehicle depreciationTotalMarchActual56,90016$ 9,2003,2756351,1108,6103,056$ 25,886a. $0.17 per mile for gasoline.b. $0.06 per mile for oil, minor repairs, and parts.GasolineOil, minor repairs, partsOutside repairsInsuranceSalaries and benefitsVehicle depreciationTotalPlanningBudget48,90015$ 8,3132,934The planning budget was based on the following assumptions:c. $30 per automobile per month for outside repairs.d. $66 per automobile per month for insurance.e. $8,610 per month for salaries and benefits.f. $191 per automobile per month for depreciation.Boyne University Motor PoolSpending VariancesFor the Month Ended March 314509908,6102,865$ 24,162(Over)UnderBudget$ (887)(341)(185)(120)0The supervisor of the motor pool is unhappy with the report, claiming it paints an unfair picture of the motor pool's performance.(191)$ (1,724)Required:1. Calculate the spending variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

The variance is the difference between the actual and standard production data. The spending…

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 pool's monthly planning budget is based on operating 15 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 Miles Autos Gasoline Oil, minor repairs, parts Outside repairs Insurance Salaries and benefits. Vehicle depreciation Total March Actual 56,900 16 $ 9,200 3,275 635 1,110 8,610 3,056 $ 25,886 The planning budget was based on the following assumptions: Planning Budget 48,900 15 $ 8,313 2,934 450 990 8,610 2,865 $ 24,162 a. $0.17 per mile for gasoline. . $0.06 per mile for oil, minor repairs, and parts. c. $30 per automobile per month for outside repairs. Gasoline Oil, minor repairs, parts Outside repairs Insurance d. $66 per automobile per month for insurance. e. $8,610 per month for salaries and benefits. f. $191 per automobile per month for depreciation. Boyne University Motor Pool Spending Variances For the Month Ended March 31 (Over) Under Budget The supervisor of the motor pool is unhappy with the report, claiming it paints an unfair picture of the motor pool's performance. Required: 1. Calculate the spending variances for March. (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.) $ (887) (341) (185) (120) 0 (191) $ (1,724)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 25P: Novo, Inc., wants to develop an activity flexible budget for the activity of moving materials. Novo...