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 63 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Instructor wages Classroon supplies Utilities Campus rent Insurance Administrative expenses Fixed Cost per Cost per Cost per Month Student $ 270 Revenue Instructor wages Classroom supplies Utilities $1,210 $5,000 $ 2,300 $3,900 Campus rent Insurance Administrative expenses Course $ 2,930 $ 55 For example, administrative expenses should be $3,900 per month plus $41 per course plus $3 per student. The company's sales should average $870 per student. 5:41 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 $ 51,910 $ 11,000 $ 16,860 $ 1,840 $5,000 $ 2,440 $3,679 53 Required: Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances 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.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
![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 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
Fixed
Cost per
Month
$ 1,210
$5,000
$ 2,300
$ 3,900
Revenue
Instructor wages
Classroom supplies
Utilities
Campus rent
Insurance
Administrative expenses
Cost per
Course
$ 2,930
$ 55
Cost per
Student
$ 41
$3
For example, administrative expenses should be $3,900 per month plus $41 per course plus $3 per student. The company's sales
should average $870 per student.
$ 270
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
$ 51,910
$ 11,000
$ 16,860
$ 1,840
$5,000
$ 2,440
$3,679
Required:
Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F164623c8-d90e-495a-adbf-c7ad903bb49b%2F43a237c7-0292-448e-a8b8-a02fe247579f%2F0m6og87_processed.jpeg&w=3840&q=75)
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