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 65 students enrolled in those two courses. Dat concerning the company's cost formulas appear below: Instructor vages Classroom supplies utilities Campus rent Insurance Administrative expenses Fixed Cost per Hooth $1,250 $4,900 $2,100 $3,700 Cost per Course 2,960 $80 Coat per Student $300 5.45 14 For example, administrative expenses should be $3,700 per month plus $45 per course plus $4 per student. The company's sales should average $890 per student. The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 61 students. The actual operating results for September appear below.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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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 65 students enrolled in those two courses. Data
concerning the company's cost formulas appear below.
Fixed Coat per
Hooth
Revenue
Instructor vages
Classroon supplies
Utilities
Caspus reet
Insurance
Administrative expe
cost per Course
$ 2,940
$10
Instructor vages
Classroom supplies
utilities
Campus rent
$1,250
$ 4,900
Insurance
$ 2,100
Administrative expenses
$ 3,700
5:45
For example, administrative expenses should be $3,700 per month plus $45 per course plus $4 per student. The company's sales should average $890 per student.
The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 61 students. The actual operating results for
September appear below:
Actual
$ 54,950
$11.120
$19,350
$1,900
84,900
$2,240
Cost per
Student
$ 300
Required:
1. Prepare the company's planning budget for September.
2. Prepare the company's flexible budget for September
3. Calculate the revenue and spending variances for September.
54
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 65 students enrolled in those two courses. Data concerning the company's cost formulas appear below. Fixed Coat per Hooth Revenue Instructor vages Classroon supplies Utilities Caspus reet Insurance Administrative expe cost per Course $ 2,940 $10 Instructor vages Classroom supplies utilities Campus rent $1,250 $ 4,900 Insurance $ 2,100 Administrative expenses $ 3,700 5:45 For example, administrative expenses should be $3,700 per month plus $45 per course plus $4 per student. The company's sales should average $890 per student. The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 61 students. The actual operating results for September appear below: Actual $ 54,950 $11.120 $19,350 $1,900 84,900 $2,240 Cost per Student $ 300 Required: 1. Prepare the company's planning budget for September. 2. Prepare the company's flexible budget for September 3. Calculate the revenue and spending variances for September. 54
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