For the convenience of its reporters and staff based in London , Nightly News operates a motor pool . The motor pool operated with 20 vehicles until February of this year , when it acquired an additional automobile .
The motor pool furnishes petrol ( gasoline ), oil , and other supplies for the cars and hires one mechanic who does routine maintenance and minor repairs . Major repairs are done at a nearby commercial garage . A supervisor manages the operations . Each year the supervisor prepares an operating budget , informing Nightly News management of the funds needed to operate the pool . Depreciation on the automobiles is recorded in the budget in order to determine the cost per kilometer .
The schedule below presents the annual budget approved by the news division . The actual costs for March are compared with one-twelfth of the annual budget
P8-38 ( similar to ) p . 314
Suppose a chain of RFC franchises in Shanghai had budgeted sales for 2012 of RMB 7.7 million ( where RMB stands for the Chinese unit of currency , officially the renminbi , also called the yuan ). Cost of goods sold and other variable costs were expected to be 60 % of sales . Budgeted annual fixed costs were RMB 1.4 million . A strong Chinese economy caused actual 2012 sales to rise to RMB 10.1 million and actual profits to increase to RMB 2,300,000 . Fixed costs in 2012 were as budgeted . The franchisee was pleased with the increase in profit .