Oak Hill Township operates a motor pool with 20 vehicles. The motor pool furnishes gasoline, oil, and other supplies for the cars and hires one mechanic who does routine maintenance and minor repairs. Major repairs are done at a nearby commercial garage. A supervisor manages the operations.
Each year, the supervisor prepares a master budget for the motor pool. Depreciation on the automobiles is recorded in the budget to determine the costs per mile.
The following schedule presents the master budget for the year and for the month of July.
OAK HILL TOWNSHIP | |||||||||||||||||||
Motor Pool | |||||||||||||||||||
Budget Report for July | |||||||||||||||||||
Annual Master | One-Month | Over- or | |||||||||||||||||
Budget | Master Budget | July Actual | (Under-) Budget | ||||||||||||||||
Gasoline | $ | 81,000 | $ | 6,750 | $ | 8,515 | $ | 1,765 | |||||||||||
Oil, minor repairs, parts, and supplies | 7,200 | 600 | 760 | 160 | |||||||||||||||
Outside repairs | 5,400 | 450 | 100 | (350 | ) | ||||||||||||||
Insurance | 12,000 | 1,000 | 1,050 | 50 | |||||||||||||||
Salaries and benefits | 60,000 | 5,000 | 5,000 | 0 | |||||||||||||||
Depreciation | 52,800 | 4,400 | 4,620 | 220 | |||||||||||||||
Total cost | $ | 218,400 | $ | 18,200 | $ | 20,045 | $ | 1,845 | |||||||||||
Total miles | 900,000 | 75,000 | 94,500 | ||||||||||||||||
Cost per mile | $ | 0.2427 | $ | 0.2427 | $ | 0.2121 | |||||||||||||
Number of automobiles | 20 | 20 | 21 | ||||||||||||||||
The annual budget was based on the following assumptions:
The supervisor is unhappy with the monthly report, claiming that it unfairly presents his performance for July. His previous employer used flexible budgeting to compare actual costs to budgeted amounts.
Required:
a. What is the gasoline monthly flexible budget and the resulting amount over- or underbudget? (Use miles as the activity base.) (Do not round intermediate calculations. If the amounts are equal to budget, select "No change".)
b. What is the monthly flexible budget for the oil, minor repairs, parts, and supplies and the amount over- or underbudget? (Use miles as the activity base.) (Do not round intermediate calculations. If the amounts are equal to budget, select "No change".)
c. What is the monthly flexible budget for salaries and benefits and the resulting amount over- or underbudget? (If the amounts are equal to budget, select "No change".)
d. What is the major reason for the cost per mile to decrease from $0.2427 budgeted to $0.2121 actual?
Decreased unit fixed costs. | |
Decreased variable costs. |
Oak Hill Township operates a motor pool with 20 vehicles. The motor pool furnishes gasoline, oil,...
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 17 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...
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 20 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...
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 21 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...
uppiles and other variable overhead. i llas asked Dr. Narr Skea Dr. Narr to explain the variances. Provide possible The NUP explanations. Flexible Budgeting 8-47 Flexib, For the convenience motor pool operated wit while. The motor pool fu ence of its reporters and star based in London, CNN operates a motor pool. The d with 25 vehicles until February of this vear, when it acquired an additional auto- pool furnishes petrol (gasoline), oil, and other supplies for the cars and...
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...
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 18 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...
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 funishes gasoline, oil, and other supplies for its automobiles. A mechanic does routine maintenance and minor repairs. Major repairs are...
Boyne University omers an extensive continuing education program in many otes throughout the state. For the convenience of its faculty and administrative staff and to save costs, the university operates a motor pool. The motor poor's monthly planning budget is based on operating 21 vehicles; however, for the month of March the university purchased one additional vehicle. The motor pool fumishes gasoline, oll, and other supplies forts automobiles A mechanic does routine maintenance and minor repairs. Major repairs are performed...
please just full the fills, explanation is not necessary. Boyne University offers an extensive continuing education program in marıy cities throughout the state. For the convenience of n faculty and administrative staff and to save costs, the university operates á motor pool. The motor pool's monthly planning budget based on operating 20 vehicles, however, for the month of March the university purchased one additional vehicle. The motor podl fumishes gasoline, oil, and other supplies for its automobiles A mechanic does...
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