The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two...
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The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports-the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 65 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Instructor wages Classroom supplies. Utilities Campus rent Insurance Administrative expenses Fixed Cost per Cost per Month Course $ 2,960 $ $1,240 $4,600 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses 80 $2,400 $3,600 $ 44 Cost per Student Actual $ 54,950 $11, 120 $18,050 $ 1,970 $4,600 $ 2,540 $ 3,527 $280 For example, administrative expenses should be $3,600 per month plus $44 per course plus $5 per student. The company's sales should average $890 per student. $ 5 The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 57 students. The actual operating results for September appear below: Required: Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Courses Students Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income Actual Results $ Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 $ 4 57 54,950 11,120 18,050 1,970 4,600 2,540 3,527 41,807 13,143 Flexible Budget Planning Budget The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports-the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 65 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Instructor wages Classroom supplies. Utilities Campus rent Insurance Administrative expenses Fixed Cost per Cost per Month Course $ 2,960 $ $1,240 $4,600 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses 80 $2,400 $3,600 $ 44 Cost per Student Actual $ 54,950 $11, 120 $18,050 $ 1,970 $4,600 $ 2,540 $ 3,527 $280 For example, administrative expenses should be $3,600 per month plus $44 per course plus $5 per student. The company's sales should average $890 per student. $ 5 The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 57 students. The actual operating results for September appear below: Required: Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Courses Students Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income Actual Results $ Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 $ 4 57 54,950 11,120 18,050 1,970 4,600 2,540 3,527 41,807 13,143 Flexible Budget Planning Budget
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Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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