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. Miles Autos Gasoline Boyne University Motor Pool Cost Control Report For the Month Ended March 31 Oil, minor repairs, parts Outside repairs (Over) March Planning Under Actual Budget Budget 51,000 59,000 Insurance Salaries and benefits 16 $ 14,200 13,260 7,995 7,650 935 750 1,405 1,275 8,610 8,610 Vehicle depreciation 3,360 3,150 $ Total $ 36,505 34,695 15 $ $ (940) (345) (185) (130) 0 (210) $ (1,810) The planning budget was based on the following assumptions: a. $0.26 per mile for gasoline. b. $0.15 per mile for oil, minor repairs, and parts. c. $50 per automobile per month for outside repairs. d. $85 per automobile per month for insurance. e. $8,610 per month for salaries and benefits. f. $210 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. Note: 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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
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
(Over)
March Planning Under
Actual
Budget Budget
51,000
Miles
Autos
Gasoline
13,260
Oil, minor repairs,
7,650
parts
Outside repairs
935
750
Insurance
1,405
1,275
Salaries and benefits
8,610
8,610
Vehicle depreciation 3,360 3,150
$
Total
36,505 34,695
59,000
16
$
14,200
7,995
Gasoline
Oil, minor repairs,
parts
Outside repairs
Insurance
Salaries and benefits
Vehicle depreciation
Total
15
$
c. $50 per automobile per month for outside repairs.
d. $85 per automobile per month for insurance.
e. $8,610 per month for salaries and benefits.
f. $210 per automobile per month for depreciation.
The planning budget was based on the following assumptions:
a. $0.26 per mile for gasoline.
b. $0.15 per mile for oil, minor repairs, and parts.
$ (940)
Boyne University Motor Pool
Spending Variances
For the Month Ended March 31
(345)
(185)
(130)
0
(210)
(1,810)
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.
Note: 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.
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 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 (Over) March Planning Under Actual Budget Budget 51,000 Miles Autos Gasoline 13,260 Oil, minor repairs, 7,650 parts Outside repairs 935 750 Insurance 1,405 1,275 Salaries and benefits 8,610 8,610 Vehicle depreciation 3,360 3,150 $ Total 36,505 34,695 59,000 16 $ 14,200 7,995 Gasoline Oil, minor repairs, parts Outside repairs Insurance Salaries and benefits Vehicle depreciation Total 15 $ c. $50 per automobile per month for outside repairs. d. $85 per automobile per month for insurance. e. $8,610 per month for salaries and benefits. f. $210 per automobile per month for depreciation. The planning budget was based on the following assumptions: a. $0.26 per mile for gasoline. b. $0.15 per mile for oil, minor repairs, and parts. $ (940) Boyne University Motor Pool Spending Variances For the Month Ended March 31 (345) (185) (130) 0 (210) (1,810) 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. Note: 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.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Strategic business units
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education