Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

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

image text in transcribed
image text in transcribed
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 63 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Instructor wages Classroom supplies Utilities Campus rent Insurance Adminintrative expensen Fixed Cost per cost per cont per Month Course Student $ 2,960 $ 280 $1,210 $ 75 $4,500 $2,000 $3,500 3 40 $6 For example, administrative expenses should be $3,500 per month plus $40 per course plus $6 per student. The company's sales should average $870 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 57 students. The actual operating results for September appear below: Revenue Instructor wages classroom supplies Utilities Campus rent Insurance Administrative expenses Actual $51.910 $11,120 $ 17,490 $ 1.920 $4,500 $ 2,140 $ 3.464 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 (ie, zero variance). Input all amounts as positive values.) Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 Actual Results Revenue and Spending Variances Activity Variances Planning Budget Flexible Budget 4 63 4 4 Courses Students 83 Revenue $ 51,910 $ 9110 $ 57,347 U $ 54,810 F Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income 11,120 17,490 1.920 4,500 2,140 3,464 40,634 11,276 2,780 None 307 178 None None tu IF IF 11,1201 19,331 1,920 4,500 2,000 4,038 42,909 $ 14,465 None TU PF 11,840 17,640 1,510 4.500 2,000 4,038 41,528 $ 13,282 F u $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions