The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses for budgeting purposes-the numbe 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 Fixed Cost per Month Cost per Course $ 2,970 Cost per Student Classroom supplies $ 270 Utilities $ 1,230 $ 60 Campus rent $ 4,700 Insurance $ 2,100 Administrative expenses $ 3,900 $ 45 $5 For example, administrative expenses should be $3,900 per month plus $45 per course plus $5 per student. The company's sales should average $890 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 61 students. The actual operating results for September were as follows: Revenue Actual $ 53,170 Instructor wages $ 11,160 Classroom supplies $ 16,860 Utilities $ 1,880 Campus rent $ 4,700 $ 2,240 $ 3,821 Insurance Administrative expenses 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. Courses Students Revenue Expenses Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expenses Net operating income Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 Actual Results Flexible Budget Activity Varian 61 $ 53,170 $ 53,170 11,160 16,860 1,880 4,700 2,240 3,821 40,661 $ 12,509
The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses for budgeting purposes-the numbe 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 Fixed Cost per Month Cost per Course $ 2,970 Cost per Student Classroom supplies $ 270 Utilities $ 1,230 $ 60 Campus rent $ 4,700 Insurance $ 2,100 Administrative expenses $ 3,900 $ 45 $5 For example, administrative expenses should be $3,900 per month plus $45 per course plus $5 per student. The company's sales should average $890 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 61 students. The actual operating results for September were as follows: Revenue Actual $ 53,170 Instructor wages $ 11,160 Classroom supplies $ 16,860 Utilities $ 1,880 Campus rent $ 4,700 $ 2,240 $ 3,821 Insurance Administrative expenses 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. Courses Students Revenue Expenses Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expenses Net operating income Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 Actual Results Flexible Budget Activity Varian 61 $ 53,170 $ 53,170 11,160 16,860 1,880 4,700 2,240 3,821 40,661 $ 12,509
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 numbe
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
Fixed
Cost per
Month
Cost per
Course
$ 2,970
Cost per
Student
Classroom supplies
$ 270
Utilities
$ 1,230
$ 60
Campus rent
$ 4,700
Insurance
$ 2,100
Administrative expenses
$ 3,900
$ 45
$5
For example, administrative expenses should be $3,900 per month plus $45 per course
plus $5 per student. The company's sales should average $890 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 61 students. The actual operating results for
September were as follows:
Revenue
Actual
$ 53,170
Instructor wages
$ 11,160
Classroom supplies
$ 16,860
Utilities
$ 1,880
Campus rent
$ 4,700
$ 2,240
$ 3,821
Insurance
Administrative expenses
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.
Courses
Students
Revenue
Expenses
Instructor wages
Classroom supplies
Utilities
Campus rent
Insurance
Administrative expenses
Total expenses
Net operating income
Gourmand Cooking School
Flexible Budget Performance Report
For the Month Ended September 30
Actual Results
Flexible
Budget
Activity Varian
61
$
53,170
$ 53,170
11,160
16,860
1,880
4,700
2,240
3,821
40,661
$
12,509
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