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 50 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost per MonthCost per Course Cost per StudentInstructor wages $ 3,080 Classroom supplies S 260Utilities$ 870$ 130 Campus rent$ 4,200 Insurance$ 1,890 Administrative expenses$ 3,270$ 15$ 4 For example, administrative expenses should be $3,270 per month plus $15 per course plus $4 per student. The company's sales should average $800 per student. The company planned to run three courses with a total of 45 students; however, it actually ran three courses with a total of only 42 students. The actual operating results for September were as follows: Actual Revenue$ 32,400Instructor wages$ 9,080Classroom supplies$ 8,540Utilities$ 1,530Campus rentS 4,200Insurance$ 1,890Administrative expenses$ 3,790 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.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

1

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 50
students enrolled in those two courses. Data concerning the company's cost formulas appear below:
Fixed Cost per MonthCost per Course Cost per StudentInstructor wages $ 3,080 Classroom supplies S
260Utilities$ 870$ 130 Campus rent$ 4,200 Insurance$ 1,890 Administrative expenses$ 3,270$ 15$ 4
For example, administrative expenses should be $3,270 per month plus $15 per course plus $4 per student.
The company's sales should average $800 per student.
The company planned to run three courses with a total of 45 students; however, it actually ran three courses
with a total of only 42 students. The actual operating results for September were as follows:
Actual Revenue$ 32,400Instructor wages$ 9,080Classroom supplies$ 8,540Utilities$ 1,530Campus rent$
4,200Insurance$ 1,890Administrative expenses$ 3,790
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.)
Transcribed Image Text: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 50 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost per MonthCost per Course Cost per StudentInstructor wages $ 3,080 Classroom supplies S 260Utilities$ 870$ 130 Campus rent$ 4,200 Insurance$ 1,890 Administrative expenses$ 3,270$ 15$ 4 For example, administrative expenses should be $3,270 per month plus $15 per course plus $4 per student. The company's sales should average $800 per student. The company planned to run three courses with a total of 45 students; however, it actually ran three courses with a total of only 42 students. The actual operating results for September were as follows: Actual Revenue$ 32,400Instructor wages$ 9,080Classroom supplies$ 8,540Utilities$ 1,530Campus rent$ 4,200Insurance$ 1,890Administrative expenses$ 3,790 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.)
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Cost allocation
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education