- The Gourmand Cooking School Runs Short Cooking Courses At Its Small Campus Management Has Identified Two Cost Drivers I 1 (142.28 KiB) Viewed 11 times
Thanks.
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. Data concerning the company's cost formulas appear below: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Revenue Instructor wages. Classroom supplies Utilities Campus rent Insurance Administrative expenses For example, administrative expenses should be $4,000 per month plus $45 per course plus $7 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 appear below: Courses Students Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Fixed Cost per Cost per Month Course $2,930 Administrative expenses Total expense Net operating income $1,220 $ 75 $5,000 $2,300 $4,000 $ 45 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.) $ $ Actual $52,140 $ 11,000 $16,490 $1,930 $ 5,000 $ 2,440 $ 4,054 Actual Results Cost per Student $260 $7 Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 4 60 52,140 11,000 16,490 1,930 5,000 2,440 4,054 40,914 11,226 Flexible Budget Planning Budget