Variable Costing Income Statement and Contribution Margin Analysis for a Service Company

The actual and planned data for Underwater University for the Fall term were as follows:

	Actual		Planned
Enrollment	4,500		4,125
Tuition per credit hour	$120		$135
Credit hours	60,450		43,200
Registration, records, and marketing cost per enrolled student	$275		$275
Instructional costs per credit hour	$64		$60
Depreciation on classrooms and equipment	$825,600		$825,600

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.

Question Content Area

a. Prepare a variable costing income statement showing the contribution margin and income from operations for the Fall term.

Underwater University Variable Costing Income Statement For the Fall Term

Revenue	$fill in the blank a8e4f1fe5f82009_1
Variable costs:
Registration, records, and marketing cost	$fill in the blank a8e4f1fe5f82009_2
Instructional costs	fill in the blank a8e4f1fe5f82009_3
Total variable costs	$fill in the blank a8e4f1fe5f82009_4
Contribution margin	$fill in the blank a8e4f1fe5f82009_5
Depreciation on classrooms and equipment	fill in the blank a8e4f1fe5f82009_6
Income from operations	$fill in the blank a8e4f1fe5f82009_7

Question Content Area

b. Prepare a contribution margin analysis report comparing planned with actual performance for the Fall term. If an amount is zero, enter "0".

Underwater University Contribution Margin Analysis For the Fall Term

Planned contribution margin		$fill in the blank bfeec7ffa05ffac_1
Effect of change in revenue:
Revenue quantity factor	$fill in the blank bfeec7ffa05ffac_2
Unit price factor	fill in the blank bfeec7ffa05ffac_3
Total effect of change in revenue		fill in the blank bfeec7ffa05ffac_4
Effect of changes in registration, records, and marketing costs:
Variable cost quantity factor	$fill in the blank bfeec7ffa05ffac_5
Unit cost factor	fill in the blank bfeec7ffa05ffac_6
Total effect of changes in registration, records, and marketing costs		fill in the blank bfeec7ffa05ffac_7
Effect of changes in instructional costs:
Variable cost quantity factor	$fill in the blank bfeec7ffa05ffac_8
Unit cost factor	fill in the blank bfeec7ffa05ffac_9
Total effect of changes in instructional cost		fill in the blank bfeec7ffa05ffac_10
Actual contribution margin