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 per Cost per Cost per Month Student Course $ 2,940 $ 270 $65 $1,210 $4,700 $2,200 $4,000 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses For example, administrative expenses should be $4,000 per month plus $43 per course plus $6 per student. The company's sales should average $880 per student. $43 The company planned to run four courses with a total of 62 students; however, it actually ran four courses with a total of only 60 students. The actual operating results for September were as follows: Actual $ 51,660 $ 11,040 $ 16,590 $6 $ 1,880 $ 4,700 $ 2,340 $ 3,970 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.)
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 per Cost per Cost per Month Student Course $ 2,940 $ 270 $65 $1,210 $4,700 $2,200 $4,000 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses For example, administrative expenses should be $4,000 per month plus $43 per course plus $6 per student. The company's sales should average $880 per student. $43 The company planned to run four courses with a total of 62 students; however, it actually ran four courses with a total of only 60 students. The actual operating results for September were as follows: Actual $ 51,660 $ 11,040 $ 16,590 $6 $ 1,880 $ 4,700 $ 2,340 $ 3,970 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Question
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
Revenue
Instructor wages
Classroom supplies
Utilities
Campus rent
Insurance
Administrative expenses
Courses
Students
Revenue
Expenses:
For example, administrative expenses should be $4,000 per month plus $43 per course plus $6 per student. The company's sales
should average $880 per student.
Instructor wages
Classroom supplies
Utilities
Campus rent
Insurance
Fixed
Cost per Cost per Cost per
Month
Student
Course
$ 2,940
$65
The company planned to run four courses with a total of 62 students; however, it actually ran four courses with a total of only 60
students. The actual operating results for September were as follows:
Administrative expenses
Total expense
Net operating income
$ 1,210
$ 4,700
$ 2,200
$ 4,000
$
$
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.)
Actual
$ 51,660
$ 11,040
$ 16,590
$ 1,880
$ 4,700
$ 2,340
$ 3,970
$43
Actual
Results
4
60
51,660
11,040
16,590
1,880
Gourmand Cooking School
Flexible Budget Performance Report
For the Month Ended September 30
Revenue and
Spending
Variances
Flexible
Budget
4,700
2,340
3,970
40,520
11,140
$ 270
$ 1,140 U
$ 6
562 X F
8,100 F
390
U
410
U
None
Answer is not complete.
(2) XU
>
X
None X
X
✓
Activity Variances
Planning
Budget
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
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
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education