Question

Variable Costing Income Statement for a Service Company The actual and planned data for Underwater University for the Fall term were as follows: Actual Planned Enrollment 4,500 4,125 Tuition per credit hour $120 $135 Credit hours 60,450 43,200 Registration, records, and marketing costs per enrolled student $275 $275 Instructional costs per credit hour $60 Depreciation on classrooms and equipment $825,600 $825,600 Registration, records, and marketing costs vary by the number of enrolled students, while instructional costs vary by the number of credit hours. Depreciation is a fixed cost. Prepare a variable costing income statement showing the contribution margin and operating income for the Fall term. Underwater University Variable Costing Income Statement For the Fall Term $64 Revenue Variable costs Registration, records, and marketing costs Instructional costs Total are Shona

Answer 1

Solution

Underwater University
Variable costing income statement
For the Fall Term
Revenue	$        7,254,000
Variable costs:
Registration , records and marketing costs	$        1,237,500
Instruction costs	$        3,868,800
Total variable costs	$        5,106,300
Contribution margin	$        2,147,700
Depreciation on classroom and equipment	$            825,600
Operating income	$        1,322,100