Hislop 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 elementper monthVariable elementper studentVariable element per courseRevenue$0 $212 $0 Faculty wages$0 $0 $2,100 Course supplies$0 $37 $45 Administrative expenses$28,800 $6 $26 In June, the school budgeted for 1,910 students and 111 courses. The school's income statement showing the actual results for the month appears below:Hislop TechIncome StatementFor the Month Ended June 30Actual students 1,810Actual courses 106Revenue$387,740Expenses: Faculty wages 218,200 Course supplies 72,360 Administrative expenses 41,716Total expense 332,276Net operating
income$ 55,464Required:Prepare a report showing the school's revenue and spending variances for June. Label each variance as favorable (F) or unfavorable (U).
What will be an ideal response?
| Hislop Tech | |||||||
| Revenue and Spending Variances | |||||||
| For the Month Ended June 30 | |||||||
| Actual Results | Revenue and Spending Variances | Flexible Budget | |||||
| Students (q1) | 1,810 | 1,810 | |||||
| Courses (q2) | 106 | 106 | |||||
| Revenue ($212q1) | $ | 387,740 | $ | 4,020 | F | $ | 383,720 |
| Expenses: | |||||||
| Faculty wages ($2,100q2) | 218,200 | 4,400 | F | 222,600 | |||
| Course supplies ($37q1 + $45q2) | 72,360 | 620 | U | 71,740 | |||
| Administrative expenses ($28,800 + $6q1 + $26q2) | 41,716 | 700 | F | 42,416 | |||
| Total expense | 332,276 | 4,480 | F | 336,756 | |||
| Net operating income | $ | 55,464 | $ | 8,500 | F | $ | 46,964 |
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