Question

Roberds 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		$	238		$	0
Faculty wages	$	0		$	0		$	2,980
Course supplies	$	0		$	40		$	28
Administrative expenses	$	25,900		$	15		$	40

In March, the school budgeted for 1,790 students and 76 courses. The school's income statement showing the actual results for the month appears below:

Roberds Tech
Income Statement
For the Month Ended March 31
Actual students		1,690
Actual courses		79
Revenue	$	351,340
Expenses:
Faculty wages		208,950
Course supplies		56,590
Administrative expenses		55,562
Total expense		321,102
Net operating income	$	30,238

Required:

Prepare a flexible budget performance report showing both the school's activity variances and revenue and spending variances for March. Label each variance as favorable (F) or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Roberds Tech
Flexible Budget Performance Report
For the Month Ended March 31
	Actual Results	Revenue and Spending Variances		Flexible Budget	Activity Variances		Planning Budget
Students	1,690			1,690			1,790
Courses	79			79			76
Revenue
Expenses:
Faculty wages
Course supplies
Administrative expenses
Total expense
Net operating income

Answer 1

		Flexible Budget Performance Report
		for the month ending March 31
		Acutal	Revenue and		Flexible	Activity variance		Planning
		results	spending variance		budget			budget
Students		1,690			1,690			1,790
Courses		79			79			76
Revenue		351,340	50,880	U	402220	23800	U	426020
expenses:
Faculty wages		208,950	26,470	F	235420	8940	U	226480
course supplies		56,590	13,222	F	69812	3916	F	73728
Administrative expenses		55,562	1,152	U	54410	1380	F	55790
total expense		321,102	40,844	F	359642	3644	U	355998
net operating income		30,238	10,036	U	42578	27444	U	70022