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Problem - Variable costing income statement and contribution margin analysis-service company
The actual and planned data for Fly University for the Fall term 2012 were as follows:
Actual
Planned
Enrollment
Tuition per credit hour
Credit hours
Registration, records, and marketing cost per enrolled student
Instructional costs per credit hour
Depreciation on classrooms and equipment
6,010
$160
80,600
$370
$85
$1,100,800
5,500
$180
57,600
$80
Registration, records, and marketing costs vary by the number of enrolled students, while instructional costs vary by the number of credit hours. Depreciation is a fixed cost.
Required -
a. Prepare a variable costing income statement showing the contribution margin and income from operations for the Fall 2012 term.
b. Prepare a contribution margin analysis report comparing planned with actual performance for the Fall 2012 term.
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