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 pools 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.

Boyne University Motor Pool Cost Control Report For the Month Ended March 31

March ActualPlanning Budget(Over) Under Budget

Miles 57,400 49,400

Autos 26 25

Gasoline$6,400 $5,928 $(472)

Oil, minor repairs, parts 5,770 5,434 (336)

Outside repairs 1,050 875 (175)

Insurance 1,905 1,775 (130)

Salaries and benefits 8,610 8,610 0

Vehicle depreciation 5,096 4,900 (196)

Total$28,831 $27,522 $ (1,309)

The planning budget was based on the following assumptions:

$0.12 per mile for gasoline.

$0.11 per mile for oil, minor repairs, and parts.

$35 per automobile per month for outside repairs.

$71 per automobile per month for insurance.

$8,610 per month for salaries and benefits.

$196 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.

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.)

	Boyne University Motor Pool Spending Variances For the Month Ended March 31 Gasoline Oil, minor repairs, parts Outside repairs Insurance Salaries and benefits Vehicle depreciation Total

2. Prepare a flexible budget performance report for the year that shows both spending variances and activity variances. (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.)

The Little Theatre Flexible Budget Performance Report For the Year Ended December 31 Actual Results Flexible Budget Planning Budget Number of productions 7 6 Number of performances 168 108 Actors' and directors' wages $385,700 $233,280 Stagehands' wages 76,100 49,680 Ticket booth personnel and ushers' wages 53,900 33,480 Scenery, costumes, and props 131,400 108,960 Theatre hall rent 102,800 71,280 Printed programs 63,100 44,280 Publicity 16,700 12,960 Administrative expenses 71,500 60,480 Total $901,200 $614,400