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 62 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 Cost per per Month Course $ 2,950 3 75 $1,240 $5,000 $2,200 $3,600 3 44 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Adeinistrative expenses Cost per Student $260 For example, administrative expenses should be $3,600 per month plus $44 per course plus $6 per student. The company's sales should average $890 per student. $6 The company planned to run four courses with a total of 62 students, however, it actually ran four courses with a total of only 58 students. The actual operating results for September appear below. Actual $ 52,200 $11,000 $ 15,970 $1,950 $5,000 $ 2,340 $ 3,574 4 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 (.e., zero varience). Input all amounts as positive values.) Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30
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 62 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 Cost per per Month Course $ 2,950 3 75 $1,240 $5,000 $2,200 $3,600 3 44 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Adeinistrative expenses Cost per Student $260 For example, administrative expenses should be $3,600 per month plus $44 per course plus $6 per student. The company's sales should average $890 per student. $6 The company planned to run four courses with a total of 62 students, however, it actually ran four courses with a total of only 58 students. The actual operating results for September appear below. Actual $ 52,200 $11,000 $ 15,970 $1,950 $5,000 $ 2,340 $ 3,574 4 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 (.e., zero varience). Input all amounts as positive values.) Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:Revenue
Instructor wages
Classroom supplies.
Utilities
Campus rent
Insurance
Administrative expenses
Courses
Students
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.)
Revenue
Expenses
Instructor wages
Classroom supplies
Utilities
Campus rent
Insurance
Administrative expenses
Total expense
Net operating income
$ 52,280
$ 11,080
$ 15,970
$1,950
$5,000
$ 2,340
$3,574
S
Actual Results
Gourmand Cooking School
Flexible Budget Performance Report
For the Month Ended September 30
$
4
58
52,280
11,080
15,970
1,950
5,000
2,340
3,574
39,914
12,366
Flexible
Budget
+++
Planning
Budget
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 62 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 Cost per
per Month
Revenue
Instructor wages
Classroom supplies
Utilities
Campus rent
Insurance
Administrative expenses
$1,240 5 75
$5,000
$2,200
$3,600 $ 44
Courses
Course
$ 2,950
For example, administrative expenses should be $3,600 per month plus $44 per course plus $6 per student. The company's sales
should average $890 per student
The company planned to run four courses with a total of 62 students, however, it actually ran four courses with a total of only 58
students. The actual operating results for September appear below
Actual
$ 52,200
$11,080
$15,970
$ 1,950
$5,000
$ 2,340
$ 3,574
Cost per
student
$260
$6
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 (l.e., zero
variance). Input all amounts as positive values.)
Actual Results
Gourmand Cooking School
Flexible Budget Performance Report
For the Month Ended September 30
Flexible
Budget
Planning
Budget
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