The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses for budgeting purposes-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: Fixed Cost Cost per Cost per Month Course per Student Instructor wages $ 2,910 Classroom supplies $ 280 $ Utilities $ 85 1,230 $ Campus rent 5,100 $ Insurance 2,100 $ $ 43 $ 5 3,700 Administrative expenses For example, administrative expenses should be $3,700 per month plus $43 per course plus $5 per student. The company's sales should average $900 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 55 students. The actual operating results for September were as follows: Actual Revenue $ 53,800 Instructor wages $ 10,920 Classroom supplies $ 17,490 Utilities $ 1,980 Campus rent $ 5,100 Insurance $ 2,240 Administrative expenses $ 3,613 Required: Prepare a flexible budget performance report for September. Note: 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.
The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses for budgeting purposes-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: Fixed Cost Cost per Cost per Month Course per Student Instructor wages $ 2,910 Classroom supplies $ 280 $ Utilities $ 85 1,230 $ Campus rent 5,100 $ Insurance 2,100 $ $ 43 $ 5 3,700 Administrative expenses For example, administrative expenses should be $3,700 per month plus $43 per course plus $5 per student. The company's sales should average $900 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 55 students. The actual operating results for September were as follows: Actual Revenue $ 53,800 Instructor wages $ 10,920 Classroom supplies $ 17,490 Utilities $ 1,980 Campus rent $ 5,100 Insurance $ 2,240 Administrative expenses $ 3,613 Required: Prepare a flexible budget performance report for September. Note: 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 it uses for budgeting purposes-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:
Fixed
Cost
Cost
per
Cost per
Month
Course
per
Student
Instructor wages
$ 2,910
Classroom supplies
$ 280
$
Utilities
$ 85
1,230
$
Campus rent
5,100
$
Insurance
2,100
$
$ 43
$ 5
3,700
Administrative expenses
For example, administrative expenses should be $3,700 per month plus $43 per
course plus $5 per student. The company's sales should average $900 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 55 students. The actual operating
results for September were as follows:
Actual
Revenue
$ 53,800
Instructor wages
$ 10,920
Classroom supplies
$ 17,490
Utilities
$ 1,980
Campus rent
$ 5,100
Insurance
$ 2,240
Administrative expenses
$ 3,613
Required:
Prepare a flexible budget performance report for September.
Note: 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.
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