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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 save costs, the university operates a motor pool. The motor pool's 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 Miles Autos Gasoline Oil, minor repairs, parts Outside repairs Insurance Salaries and benefits Vehicle depreciation March Actual Total 56,600 23 $ 10,670 4,710 770 Planning Budget 48,600 22 $ 9,720 4,374 594 1,510 8,610 4,324 $ 30,594 $ 28,820 The planning budget was based on the following assumptions: $0.20 per mile for gasoline. $0.09 per mile for oil, minor repairs, and parts. $27 per automobile per month for outside repairs. $63 per automobile per month for insurance. $8,610 per month for salaries and benefits. $188 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 pool's performance. Required: 1. Calculate the spending variances for March. 1,386 8,610 4,136 (Over) Under Budget $ (950) (336) (176) (124) 0 (188) $ (1,774)

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 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 Miles Autos Gasoline Oil, minor repairs, parts Outside repairs Insurance Salaries and benefits Vehicle depreciation March Actual Total 56,600 23 $ 10,670 4,710 770 Planning Budget 48,600 22 $ 9,720 4,374 594 1,510 8,610 4,324 $ 30,594 $ 28,820 The planning budget was based on the following assumptions: $0.20 per mile for gasoline. $0.09 per mile for oil, minor repairs, and parts. $27 per automobile per month for outside repairs. $63 per automobile per month for insurance. $8,610 per month for salaries and benefits. $188 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 pool's performance. Required: 1. Calculate the spending variances for March. 1,386 8,610 4,136 (Over) Under Budget $ (950) (336) (176) (124) 0 (188) $ (1,774)

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
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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 save costs, the university operates a motor pool. The motor pool's 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 Miles Autos Gasoline Oil, minor repairs, parts Outside repairs Insurance Salaries and benefits Vehicle depreciation March Actual Total 56,600 23 $ 10,670 4,710 770 Planning Budget 48,600 22 $ 9,720 4,374 594 1,510 8,610 4,324 $ 30,594 $ 28,820 The planning budget was based on the following assumptions: $0.20 per mile for gasoline. $0.09 per mile for oil, minor repairs, and parts. $27 per automobile per month for outside repairs. $63 per automobile per month for insurance. $8,610 per month for salaries and benefits. $188 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 pool's performance. Required: 1. Calculate the spending variances for March. 1,386 8,610 4,136 (Over) Under Budget $ (950) (336) (176) (124) 0 (188) $ (1,774)
Transcribed Image Text: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 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 Miles Autos Gasoline Oil, minor repairs, parts Outside repairs Insurance Salaries and benefits Vehicle depreciation March Actual Total 56,600 23 $ 10,670 4,710 770 Planning Budget 48,600 22 $ 9,720 4,374 594 1,510 8,610 4,324 $ 30,594 $ 28,820 The planning budget was based on the following assumptions: $0.20 per mile for gasoline. $0.09 per mile for oil, minor repairs, and parts. $27 per automobile per month for outside repairs. $63 per automobile per month for insurance. $8,610 per month for salaries and benefits. $188 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 pool's performance. Required: 1. Calculate the spending variances for March. 1,386 8,610 4,136 (Over) Under Budget $ (950) (336) (176) (124) 0 (188) $ (1,774)
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