Please answer a and b of ex 20-22. Variable costing income statement and contrib

Question

Please answer a and b of ex 20-22.

Variable costing income statement and contribution margin analysis-service company The actual and planned data for Underwater University for the Fall term 2014 were as follows: Enrollment 4,500 4,125 Tuition per credit hour $120 $135 Credit hours 60,450 43,200 Registration, records, and marking coast per enrolled student $275 $275 Industrial coast per credit hour $64 $60 Depreciation on classroom 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 income from operations for the Fall 2014 term. Prepare a contribution margin analysis report comparing planned with actual performance for the Fall 2014 term.

Explanation / Answer

Statement showing variable costing Particulars Actual Tution per credit hour                120.00 Credit hours          60,450.00 Revenue    7,254,000.00 Variable Costs: Reg, records and marketing cost    1,237,500.00 Instruction costs    3,868,800.00 Variable costs    5,106,300.00 Contribution    2,147,700.00 Fixed Costs: Depreciation        825,600.00 Fixed Costs        825,600.00 Income    1,322,100.00 Contribution Margin Analysis Particulars Actual Planned Difference Comments Tution per credit hour                120.00                  135.00                      (15.00) Unfavourable Credit hours          60,450.00            43,200.00                17,250.00 Favourable Revenue    7,254,000.00      5,832,000.00          1,422,000.00 Favourable Variable Costs: Reg, records and marketing cost    1,237,500.00      1,134,375.00              103,125.00 No Change as No of student have increased that’s why there is diff in total but per student is same Instruction costs    3,868,800.00      2,592,000.00          1,276,800.00 Unfavourable Variable costs    5,106,300.00      3,726,375.00          1,379,925.00 Contribution    2,147,700.00      2,105,625.00                42,075.00 Favourable

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