The photocopying department in a community college has budgeted monthly costs at $40,000 per month plus $7 per student. Normally 800 students are enrolled. During January there were 730 students (which is within the relevant range). At the end of the month, actual fixed costs were $42,000, and variable costs were $3,650.
A.Develop a static budget for photocopying costs based on 800 students.
B.Calculate the January static budget variance for fixed and variable photocopying costs.
C.Develop a flexible budget for the actual volume of students in January.
D.Calculate the January flexible budget variance for fixed and variable photocopying costs.
E.Which variance information-part (B) or (D)-is of higher quality? Explain.