Question

Rizza 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 $ 0 Revenue Faculty wages Course supplies Administrative expenses Variable element per student $ 153 $ 0 $25.15 $ 5.3 Variable element per course $ 0 $2,630 $ 19.6 $ 38.3 $ 0 $12,800 In April, the school budgeted for 1,250 students and 45 courses. The school's income statement showing the actual results for the month appears below: Rizza Tech Income Statement For the Month Ended April 30 Actual students 1,650 Actual courses Revenue $257,490 47 Expenses: Faculty wages Course supplies Administrative expenses 122,680 42,735 23,036 Total expense 188,451 Net operating income $ 69,039 Required: Prepare a report showing the school's revenue and spending variances for April. (Input all amounts as positive values.Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations and final answers to the nearest dollar amount.) Rizza Tech Revenue and Spending Variances For the Month Ended April 30 (Click to select) Revenue Expenses Faculty wages Course supplies Administrative expenses (Click to select) (Click to select) (Click to select) Total expense (Click to select) Net operating income (Click to select)

Answer 1

Answer

	Revenue & Spending Variance
Revenues	$5,040	Favourable
Expenses:
Faculty Wages	$930	Favourable
Course supplies	$316	Unfavourable
Administrative expenses	$309	Favourable
Total expenses	$923	Favourable
Net Operating Income	$5,963	Favourable

--Working

	Actual	Revenue & Spending Variance		Flexible Budget
Revenues	$257,490	$5,040	Favourable	$252,450	=1650*153
Expenses:
Faculty Wages	$122,680	$930	Favourable	$123,610	=47*2630
Course supplies	$42,735	$316	Unfavourable	$42,419	=+(1650*25.15)+(47*19.6)
Administrative expenses	$23,036	$309	Favourable	$23,345	=12800+(1650*5.3)+(47*38.3)
Total expenses	$188,451	$923	Favourable	$189,374
Net Operating Income	$69,039	$5,963	Favourable	$63,076