Rizza Tech is a for-profit vocational school. The school bases its budgets on tw

Question

Rizza Tech is a for-profit vocational school. The school bases its budgets on two measures of activity (i.e., cost drivers), namely student and course. The school uses the following data in its budgeting:

  

In April, the school budgeted for 1,250 students and 45 courses. The school's income statement showing the actual results for the month appears below:

  

    

Prepare a report showing the school's revenue and spending variances for April. (Input all amounts as positive values.Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations and final answers to the nearest dollar amount.)

Fixed
element
per month Variable
element
per student Variable
element
per course   Revenue $ 0 $ 170 $ 0   Faculty wages $ 0 $ 0 $ 2,800   Course supplies $ 0 $ 26.00 $ 23.0   Administrative expenses $ 12,800 $ 7.0 $ 40.0

Explanation / Answer

Flexible Actual Revenue and spending variance Revenue 280500   [1650*170] 291490 10990 F less:expenses Faculty wages 131600   [2800*47] 127780 3820 F course supplies 43981      [(1650*26)+(23*47)] 45540 1559 U Administration expenses 26230   [(1650*7)+(47*40)+ 12800] 26091 139 F Total expense 201811 199411 2400 F Net income 78689 92079 13390 F

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