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 61 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 $2,920 $260 $1,220 $ 85 $4,900 $2,300 $3,900 $ 45 $ 4 For example, administrative expenses should be $3,900 per month plus $45 per course plus $4 per student. The company's sales should average $860 per student. The company planned to run four courses with a total of 61 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 $ 49, 560 $ 10,960 $ 15, 710 $ 1,970 $ 4,900 $ 2,440 $ 3,750 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. Required 1 Required 2 Required 3 Prepare the company's planning budget for September. Gourmand Cooking School Planning Budget For the Month Ended September 30 Budgeted courses Budgeted students Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income NIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII Required 1 Required 2 Required 3 ----- Prepare the company's flexible budget for September. 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 Net operating income Required 1 Required 2 Required 3 Calculate the revenue and spending variances for September. (Indicate the effect of each vari favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amount Gourmand Cooking School Revenue and Spending Variances For the Month Ended September 30 Actual Revenue and Spending Results Variances Flexible Budget Courses Students Revenue $ 49,560 Expenses: Instructor wages Classroom supplies 10,960 15,710 1,970 4,900 Utilities Campus rent Insurance Administrative expenses Total expense 2,440 3,750 39,730 9,830 Net operating income $
