Question

Liscomb 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:

	Fixed element per month	Variable element per student	Variable element per course
Revenue	$0	$297	$0
Faculty wages	$0	$0	$2,300
Course supplies	$0	$39	$45
Administrative expenses	$31,600	$12	$33

In October, the school budgeted for 1,520 students and 113 courses. The school's income statement showing the actual results for the month appears below:

Liscomb Tech Income Statement For the Month Ended October 31
Actual students	1,720
Actual courses	118
Revenue	$519,940
Expenses:
Faculty wages	270,540
Course supplies	71,430
Administrative expenses	56,574
Total expense	398,544
Net operating income	$121,396

Required:

Using the answer sheet, complete the report showing the school's activity variances for October. Label each variance as favorable (F) or unfavorable (U).

Answer 1