- The Gourmand Cooking School Runs Short Cooking Courses At Its Small Campus Management Has Identified Two Cost Drivers I 1 (40.51 KiB) Viewed 13 times
- The Gourmand Cooking School Runs Short Cooking Courses At Its Small Campus Management Has Identified Two Cost Drivers I 2 (36.46 KiB) Viewed 13 times
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 Fixed Cost per Cost per Month Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses $1,250 $ 80 $5,000 $2,300 $3,800 $ Course $2,940 For example, administrative expenses should be $3,800 per month plus $43 per course plus $6 per student. The
company's sales should average $890 per student. Actual $54,060 $11,040 The
company planned to run four courses with a total of 64 students; however, it actually ran four courses with a total of only 56 students. The actual operating results for September appear below: $16,490 $ 1,980 $ 5,000 cost per Student $260 $ 2,440 $ 3,782 $6 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.)
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.) Courses Students Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income Actual Results $ Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 $ 4 56 54,060 11,040 16,490 1,980 5,000 2,440 3,782 40,732 13,328 Revenue and Spending Variances Flexible Budget 4 56 Activity Variances Planning Budget 4 64