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 63 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			$	2,970
Classroom supplies					$	280
Utilities	$	1,210	$	50
Campus rent	$	4,500
Insurance	$	2,000
Administrative expenses	$	3,700	$	46	$	7

For example, administrative expenses should be $3,700 per month plus $46 per course plus $7 per student. The companys 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 59 students. The actual operating results for September appear below:

	Actual
Revenue	$	50,650
Instructor wages	$	11,160
Classroom supplies	$	17,490
Utilities	$	1,820
Campus rent	$	4,500
Insurance	$	2,140
Administrative expenses	$	3,751

Required:

1. Prepare the companys planning budget for September.

Prepare the companys planning budget for September.

Gourmand Cooking School
Planning Budget
For the Month Ended September 30
Revenue
Expenses:
Instructor wages
Classroom supplies
Utilities
Campus rent
Insurance
Administrative expenses
Total expense
Net operating income

2. Prepare the companys flexible budget for September.

Prepare the companys 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

3. Calculate the revenue and spending

Gourmand Cooking School
Revenue and Spending Variances
For the Month Ended September 30
	Actual Results	Revenue and Spending Variances		Flexible Budget
Courses	4
Students	59
Revenue	$50,650
Expenses:
Instructor wages	11,160
Classroom supplies	17,490
Utilities	1,820
Campus rent	4,500
Insurance	2,140
Administrative expenses	3,751
Total expense	40,861
Net operating income	$9,789