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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 64 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Instructor wages Classroon supplies Utilities Campus rent Insurance Administrative expenses Fixed Cost per Month Revenue Instructor wages Classroom supplies Utilities $ 1,230 $4,800 $ 2,300 $3,000 Campus rent Insurance Administrative expenses $ 45 For example, administrative expenses should be $3,800 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 64 students; however, it actually ran four courses with a total of only 58 students. The actual operating results for September appear below: Cost per Course $ 2,970 $ 60 Actual $ 54,060 Cost per Student $300 $ 11,160 $ 19,050 $1,800 $ 4,000 $ 2,440 $ 3,726 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.

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 64 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Instructor wages Classroon supplies Utilities Campus rent Insurance Administrative expenses Fixed Cost per Month Revenue Instructor wages Classroom supplies Utilities $ 1,230 $4,800 $ 2,300 $3,000 Campus rent Insurance Administrative expenses $ 45 For example, administrative expenses should be $3,800 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 64 students; however, it actually ran four courses with a total of only 58 students. The actual operating results for September appear below: Cost per Course $ 2,970 $ 60 Actual $ 54,060 Cost per Student $300 $ 11,160 $ 19,050 $1,800 $ 4,000 $ 2,440 $ 3,726 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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 64 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 Month $ 1,230 $ 4,800 $ 2,300 $ 3,800 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Cost per Course $ 2,970 $60 $ 45 For example, administrative expenses should be $3,800 per month plus $45 per course plus $5 per student. The company's sales should average $890 per student. Cost per Student $ 300 Actual $ 54,060 $ 11,160 $ 19,050 $ 1,880 $ 4,800 $ 2,440 $ 3,726 $5 The company planned to run four courses with a total of 64 students; however, it actually ran four courses with a total of only 58 students. The actual operating results for September appear below: 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.
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 64 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 Month $ 1,230 $ 4,800 $ 2,300 $ 3,800 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Cost per Course $ 2,970 $60 $ 45 For example, administrative expenses should be $3,800 per month plus $45 per course plus $5 per student. The company's sales should average $890 per student. Cost per Student $ 300 Actual $ 54,060 $ 11,160 $ 19,050 $ 1,880 $ 4,800 $ 2,440 $ 3,726 $5 The company planned to run four courses with a total of 64 students; however, it actually ran four courses with a total of only 58 students. The actual operating results for September appear below: 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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