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 65 students enrolled in those two courses. Data concerning the company's cost formulas appear below Fixed Cost Cost per per Month Course $ 2,970 Cost per Student $ 288 Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses $ 55 $1,240 $ 5,100 $ 2,200 $3,500 $ $ 4 For example, administrative expenses should be $3,500 per month plus $44 per course plus $4 per student The company's sales should average 5890 per student The company planned to run four courses with a total of 65 students, however, it actually ran four courses with a total of only 63 students. The actual operating results for September appear bepw The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 63 students. The actual operating results for September appear below. Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Actual $ 54,950 $ 11,160 $ 18,050 $ 1,870 $ 5,100 $ 2,340 $ 3,362 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 Not operating income 0 5 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 Revenue Expenses Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income 0 $ 0 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 Soptember 30 Actual Revenue and Spending Results Variances 4 Flexible Budget Courses Students 63 $ 54 950 11 160 18.050 Revenue Expenses Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income 1,870 5.100 2.340 3,362 41.882 13,068 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 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 65 students enrolled in those two courses. Data concerning the company's cost formulas appear below Fixed Cost Cost per per Month Course $ 2,970 Cost per Student $ 288 Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses $ 55 $1,240 $ 5,100 $ 2,200 $3,500 $ $ 4 For example, administrative expenses should be $3,500 per month plus $44 per course plus $4 per student The company's sales should average 5890 per student The company planned to run four courses with a total of 65 students, however, it actually ran four courses with a total of only 63 students. The actual operating results for September appear bepw The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 63 students. The actual operating results for September appear below. Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Actual $ 54,950 $ 11,160 $ 18,050 $ 1,870 $ 5,100 $ 2,340 $ 3,362 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 Not operating income 0 5 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 Revenue Expenses Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income 0 $ 0 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 Soptember 30 Actual Revenue and Spending Results Variances 4 Flexible Budget Courses Students 63 $ 54 950 11 160 18.050 Revenue Expenses Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income 1,870 5.100 2.340 3,362 41.882 13,068 5
