The Gourmand Cooking School runs short cooking courses at Its small campus. Management has Identified two cos 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 60 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost per Month Cost per Course Cost per Student $ 2,920 Instructor wages classroom supplies $ 300 $ 75 S 1,210 $ 4,800 $ 2,300 $ 3,500 utilities Campus rent Insurance $ 40 $ 3 Administrative expenses For example, administrative expenses should be $3,800 per month plus $40 per course plus $3 per student. The company's sales should average $870 per student. The company planned to run four courses with a total of 60 students; however, It actually ran four courses with a total of only 58 students. The actual operating results for September appear below: Actual $ 49, 300 S 10,960 $ 17,850 $ 1,920 $ 4,800 $ 2,440 $ 3,566 Revenue Instructor wages classroom supplies Utilities Campus rent Insurance Administrative expenses 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 varlances for September.
The Gourmand Cooking School runs short cooking courses at Its small campus. Management has Identified two cos 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 60 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost per Month Cost per Course Cost per Student $ 2,920 Instructor wages classroom supplies $ 300 $ 75 S 1,210 $ 4,800 $ 2,300 $ 3,500 utilities Campus rent Insurance $ 40 $ 3 Administrative expenses For example, administrative expenses should be $3,800 per month plus $40 per course plus $3 per student. The company's sales should average $870 per student. The company planned to run four courses with a total of 60 students; however, It actually ran four courses with a total of only 58 students. The actual operating results for September appear below: Actual $ 49, 300 S 10,960 $ 17,850 $ 1,920 $ 4,800 $ 2,440 $ 3,566 Revenue Instructor wages classroom supplies Utilities Campus rent Insurance Administrative expenses 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 varlances for September.
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 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 60 students enrolled in those two
courses. Data concerning the company's cost formulas appear below:
Cost per
Fixed Cost
per Month
Cost per
Student
Course
$ 2,920
Instructor wages
Classroom supplies
utilities
Canpus rent
$ 300
$ 1,210
$ 4,800
$ 2,300
$ 3,500
$ 75
Insurance
$ 40
$ 3
Administrative expenses
For example, administrative expenses should be $3.800 per month plus $40 per course plus $3 per student. The
company's sales should average $870 per student.
The company planned to run four courses with a total of 60 students; however, It actually ran four courses with a
total of only 58 students. The actual operating results for September appear below:
Revenue
Instructor wages
Classroom supplies
Utilities
Campus rent
Actual
$ 49,300
S 10,960
$ 17,85e
$ 1,920
$ 4,800
$ 2,440
$ 3,566
Insurance
Administrative expenses
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.
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