Exercise 9-12 Working with More Than One Cost Driver (LO9-1, LO9-2, LO9-3] 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 63 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 cost per Month Course Student $ 2,940 $ 270 $1,220 $ 55 $4,700 $2,300 $4,000 $ 41 $ 6 For example, administrative expenses should be $4,000 per month plus $41 per course plus $6 per student. The company's sales should average $850 per student. The company planned to run four courses with a total of 63 students; however, it actually ran four courses with a total of only 53 students. The actual operating results for September appear below: Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Actual $ 50,650 $ 11,040 $ 16,860 $ 1,850 $ 4,700 $ 2,440 $ 3,968 Required: 1. Prepare the company's planning budget for September. 2. Prepare the company's flexible budget for September. 3. Calculate the revenue and spending variances for September. Gourmand Cooking School Planning Budget For the Month Ended September 30 Actual courses 4 Actual students 53 Revenue $ 53,550 Expenses: Instructor wages 11,040 Classroom supplies 16,860 Utilities 1,850 Campus rent 4,700 Insurance 2,440 Administrative expenses 3,968 Total expense 40,858 12,692 Net operating income $ Gourmand Cooking School Flexible Budget For the Month Ended September 30 Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense 0 Net operating income $ 0 Gourmand Cooking School Revenue and Spending Variances For the Month Ended September 30 Actual Revenue and Spending Results Variances 4 Flexible Budget Courses Students 53 Revenue $ 50,650 Expenses: Instructor wages 11,040 Classroom supplies 16,860 Utilities 1,850 Campus rent 4,700 Insurance 2,440 Administrative expenses 3,968 Total expense 40,858 Net operating income $ 9,792