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 reportsthe 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 62 students enrolled in those two courses. Data concerning the companys cost formulas appear below:

	Fixed Cost per Month		Cost per Course		Cost per Student
Instructor wages			$	2,910
Classroom supplies					$	310
Utilities	$	1,210	$	70
Campus rent	$	5,100
Insurance	$	2,400
Administrative expenses	$	3,900	$	42	$	6

For example, administrative expenses should be $3,900 per month plus $42 per course plus $6 per student. The companys sales should average $860 per student.

The company planned to run four courses with a total of 62 students; however, it actually ran four courses with a total of only 54 students. The actual operating results for September appear below:

	Actual
Revenue	$	50,420
Instructor wages	$	10,920
Classroom supplies	$	19,070
Utilities	$	1,900
Campus rent	$	5,100
Insurance	$	2,540
Administrative expenses	$	3,866

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.)