variance & variable Actual Flexible Budget
|
|
Actual |
|
Flexible Budget |
|
Budgeted |
|
Number of Students |
2,340 |
|
|
|
2,240 |
|
Price Per Student |
3,175 |
|
|
|
3,225 |
|
Variable Cost Per Student |
1,910 |
|
|
|
1,950 |
|
Total Fixed Cost |
2,050,000 |
|
|
|
2,000,000 |
|
|
Actual |
|
Flexible Budget |
|
Master Budget |
|
Sales Revenue |
$ 7,429,500 |
|
$ 7,546,500 |
|
$ 7,224,000 |
|
Variable Costs |
$ 4,469,400 |
|
$ 4,563,000 |
|
$ 4,368,000 |
|
Contribution Margin |
$ 2,960,100 |
|
$ 2,983,500 |
|
$ 2,856,000 |
|
Fixed Costs |
$ 2,050,000 |
|
$ 2,000,000 |
|
$ 2,000,000 |
|
Profit |
$ 910,100 |
|
$ 983,500 |
|
$ 856,000 |
Assume that a portion of the spending variance for variable costs is due to the cost of
purchasing permission for each student to access protected content. The “standard”
allows faculty to purchase access for each student 4 times per term at a standard cost of
$26.10 per purchase. During the most recent term (when 2,340 students were
enrolled), 9,300 purchases were made at an actual cost of $243,660.
Calculate the price, usage (efficiency), and overall spending variance for purchased
access (hint: use the DM price and quantity formulas). Label each variance as
favorable or unfavorable.
a) Price Variance for Purchased Student Access:
b) Quantity (Usage) Variance for Purchased Student Access :
c) Spending Variance for Purchased Student Access: