Question

BNW is expected to have 600 students enrolled during the 2018 academic year, to be in session for 175 days and to receive $40 per day per student from the state. At the end of the school year, BNW found they had 580 students enrolled and were open for 175 days. As a result, they received $3,981,120 in total reimbursements from the state. Calculate the following variances for the state reimbursement program and indicate whether they were favorable (F) or unfavorable (U). Be sure to add up the flexible (partial) variances and check to make sure that sum equals the total variance.

                              a. BNW’s total student-reimbursement variance for the fiscal year

                              b. the portion of the student-reimbursement variance that was due to volume

                              c. the portion of the student-reimbursement variance that was due to quantity

                              d. the portion of the student-reimbursement variance that was due to price

Answer 1

	Expected	Actual		Variance
No.of students	600	580		-20
No.of days	175	175	Quantity	0
Student -days	105000	101500	Volume	-3500
Reimb. From state	40	39.22286	Price	-0.77714
Total reimbursement	4200000	3981120	218880

a. BNW’s total student-reimbursement variance for the fiscal year

(600*175*40)-3981120=

218880

UF

b. the portion of the student-reimbursement variance that was due to volume(No.of Student -Days)

((600*175)-(580*175))*40

140000

UF

c. the portion of the student-reimbursement variance that was due to quantity(no.of students)

(175-175)*580*40

0

d. the portion of the student-reimbursement variance that was due to price

(40-39.22286)*580*175=

78880

UF

a=b+c+d