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 60 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

$

2,960

Classroom supplies

$

280

Utilities

$

1,210

$

80

Campus rent

$

4,900

Insurance

$

2,100

Administrative expenses

$

3,900

$

42

$

3

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

The company planned to run four courses with a total of 60 students; however, it actually ran four courses with a total of only 56 students. The actual operating results for September appear below:

Actual

Revenue

$

48,700

Instructor wages

$

11,120

Classroom supplies

$

16,650

Utilities

$

1,940

Campus rent

$

4,900

Insurance

$

2,240

Administrative expenses

$

3,674

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.)

Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 Actual Results Flexible Budget Planning Budget 4 Courses Students 56 $ 48,700 11,120 16,650 Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income 1,940 4,900 2,240 3,674 40,524 8,176 $