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			$	2,950
Classroom supplies					$	300
Utilities	$	1,200	$	60
Campus rent	$	4,700
Insurance	$	2,300
Administrative expenses	$	3,500	$	40	$	5

For example, administrative expenses should be $3,500 per month plus $40 per course plus $5 per student. The companys sales should average $870 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 60 students. The actual operating results for September appear below:

	Actual
Revenue	$	51,040
Instructor wages	$	11,080
Classroom supplies	$	18,450
Utilities	$	1,850
Campus rent	$	4,700
Insurance	$	2,440
Administrative expenses	$	3,396

Required:

1. Prepare the companys planning budget for September.

2. Prepare the companys flexible budget for September.

3. Calculate the revenue and spending variances for September.

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 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 company's cost formulas appear below: Fixed Cost per Cost per Month Course $ 2,950 Cost per Student $300 $ 60 Instructor wages classroom supplies Utilities Campus rent Insurance Administrative expenses $1,200 $4,700 $2,300 $3,500 $ 40 $ 5 For example, administrative expenses should be $3,500 per month plus $40 per course plus $5 per student. The company's sales should average $870 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 60 students. The actual operating results for September appear below: Revenue Instructor wages classroom supplies Utilities Campus rent Insurance Administrative expenses Actual $ 51,040 $ 11,080 $ 18,450 $ 1,850 $ 4,700 $ 2,440 $ 3,396 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 Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income 0 $ 0 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 Actual courses Actual students X Revenue This is a numeric cell, so please Expenses: enter numbers only. Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense 0 Net operating income $ 0 Required 1 Required 2 Required 3 Calculate the revenue and spending 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.) Gourmand Cooking School Revenue and Spending Variances For the Month Ended September 30 Actual Revenue and Spending Results Variances Flexible Budget Courses 4 Students 60 Revenue $ 51,040 11,080 Expenses: Instructor wages Classroom supplies Utilities 18,450 1,850 Campus rent 4,700 2,440 Insurance Administrative expenses 3,396 Total expense 41,916 Net operating income $ 9,124