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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
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 64 students enrolled in those two courses. Dato concerning the company's cost formulas appear below: Instructor wages Classroom Supplies Utilities Campus sent Insurance Administrative expenses Fixed Coat per cont per cont pas Month Cous Student $2,910 $280 51, 250 6 65,000 $2,300 63,700 For exemple, administrative expenses should be $3,700 per month plus $45 per course plus $5 per student. The company's sales should average $860 per student. The company planned to run four courses with a total of 64 students; however, it actually ran four courses with a total of only 60 students. The actual operating results for September were as follows: Ravenue Instructor wages classroom Supplies Utilities Campus sent Insurance Administrative expenses Actual 652,140 610, 920 617,770 6 2,000 $ 2,440 6 3, 626 Required: Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (Indicate the effect of each varlance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (Le.. zero varlance). Input all amounts as positive values.) Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 Actual Results Flexible Budget Planning Budget 4 Courses Students 60 Revenue $ 52,140 10.920 17.770 2.000 5.000 Expenses Instructor wages Classroom Supplies URIR Campus rent Insurance Administrative expenses Total expense Net operating Income 2.440 3,626 41.756 $ 10.354
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