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 25 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.
Insurance
Salaries and benefits
Vehicle depreciation
Total
March Actual
58,500
26
$ 11,570
5,395
1,300
2,120
8,610
5,330
$ 34,325
Planning (Over) Under
Budget Budget
50,500
25
$ 10,605
5,050
1,125
2,000
8,610
5,125
$ 32,515
The planning budget was based on the following assumptions:
a. $0.21 per mile for gasoline.
b. $0.10 per mile for oil, minor repairs, and parts.
c. $45 per automobile per month for outside repairs.
d. $80 per automobile per month for insurance.
e. $8,610 per month for salaries and benefits.
f $205 ner automobile ner month for depreciation.
$ (965)
(345)
(175)
(120)
0
(205)
$ (1,810)
The planning budget was based on the following assumptions:
a. $0.20 per mile for gasoline.
b. $0.10 per mile for oil, minor repairs and parts.
c. $45 per automobile per month for outside repairs.
d. $80 per automobile per month for insurance.
e. $8,610 per month for salaries and benefits.
f. $205 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.
Calculate the spending variances for March.