The Gourmand Cooking School runs short cooking courses at its small campus Management has identified two cost drivers that 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 Administrative expenses Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Fixed Cost Cost per Cost per per Month Student $290 For example, administrative expenses should be $3,600 per month plus $41 per course plus 54 per student. The company's sales should average $890 per student The actual operating results for September appear below: Revenue Expenses Instructor wages Classroom supphes Utlites Campus rent Insurance Course $2.930 $1,200 $4,600 $2.000 $3,800 $ 41 $ 4 Required: 1. The Gourmand Cooking School expects to run four courses with a total of 63 students in September Complete the company's planning budget for this level of activity $ 90 Gourmand Cooking School Planning Budget For the Month Ended September 30 Total expense Net operating income Actual $53.170 $ 11,000 $18,120 $ 1.970 $ 4,600 Administrative expenses $ 2,140 $ 3,642
The Gourmand Cooking School runs short cooking courses at its small campus Management has identified two cost drivers that 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 Administrative expenses Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Fixed Cost Cost per Cost per per Month Student $290 For example, administrative expenses should be $3,600 per month plus $41 per course plus 54 per student. The company's sales should average $890 per student The actual operating results for September appear below: Revenue Expenses Instructor wages Classroom supphes Utlites Campus rent Insurance Course $2.930 $1,200 $4,600 $2.000 $3,800 $ 41 $ 4 Required: 1. The Gourmand Cooking School expects to run four courses with a total of 63 students in September Complete the company's planning budget for this level of activity $ 90 Gourmand Cooking School Planning Budget For the Month Ended September 30 Total expense Net operating income Actual $53.170 $ 11,000 $18,120 $ 1.970 $ 4,600 Administrative expenses $ 2,140 $ 3,642
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified
two cost drivers that 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
Administrative expenses
Revenue
Instructor wages
Classroom supplies
Utilities
Campus rent
Insurance
Administrative expenses
Fixed Cost
per Month
For example, administrative expenses should be $3,600 per month plus $41 per course plus 54 per
student. The company's sales should average $890 per student.
The actual operating results for September appear below:
Cost per Cost per
Course
Student
$2.930
$290
$1,200
$4,600
$2,000
$3,800 $ 41 $ 4
Revenue
Expenses
$ 90
Actual
$53.170
$ 11,000
$18,120
$ 1.970
$ 4,600
Required:
1. The Gourmand Cooking School expects to run four courses with a total of 63 students in September
Complete the company's planning budget for this level of activity
Instructor wages
Classroom supphes
Utlites
Campus rent
Insurance
Administrative expenses
Total expense
Net operating income
$ 2.140
$ 3,642
Gourmand Cooking School
Planning Budget
For the Month Ended September 20
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