Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Can I please have help figuring out the Administrative Expenses? I don't know what I'm doing wrong and it's messing up my totals :/ Exercise
Can I please have help figuring out the Administrative Expenses? I don't know what I'm doing wrong and it's messing up my totals :/
Exercise 9-18 Working with More Than One Cost Driver (LO9-2, LO9-3, LO9-4, LO9-5] 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: Cost per Fixed cost per Month Cost per Student Course $ 2,900 $ 290 $ 65 Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses $ $ $ $ 1,200 5,200 2,300 3,700 $ 41 $ 5 For example, administrative expenses should be $3,700 per month plus $41 per course plus $5 per student. The company's sales should average $850 per student. The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 59 students. The actual operating results for September appear below: Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Actual $ 52,350 $ 10,880 $ 18,700 $ 1,870 $ 5,200 $ 2,440 $ 3,615 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.) Answer is complete but not entirely correct. Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 Actual Results Revenue and Spending Variances Flexible Budget Activity Variances Planning Budget Courses 4 4 4 Students 59 59 65 Revenue 52,350 2,200 F $ 50,150 $ 5,100 U $ 55,250 Expenses: Instructor wages Classroom supplies 720 F 0 None 10,880 18,700 11,600 17,110 1,590 1,740 F 11,600 18,850 1,460 Utilities 410 U OOO 1,460 None Campus rent 0 None ooo None 5,200 2,300 5,200 Insurance 140 U None 2,300 3 1,870 5,200 2,440 3,615 42,705 9,645 OOOOOO 441 F 4,036 X 153 XF 4,189 Administrative expenses Total expense Net operating income 999 U 43,599 41,706 X 1,893 X F $ 8,444 x $ 3,207 x U 1,201 X F $ 11,651Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started