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 50 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 Course Student $ 3,080 $ 130 $ 870 $ 4,200 $ 1,890 $ 3,270 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses $ 260 $ 15 For example, administrative expenses should be $3,270 per month plus $15 per course plus $4 per student. The company's sales should average $800 per student. $4 The company planned to run three courses with a total of 45 students; however, it actually ran three courses with a total of only 42 students. The actual operating results for September were as follows: Actual $ 32,400 $ 9,080 $ 8,540 $ 1,530 $ 4,200 $ 1,890 $ 3,790 Required: Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). 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 50 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 Course Student $ 3,080 $ 130 $ 870 $ 4,200 $ 1,890 $ 3,270 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses $ 260 $ 15 For example, administrative expenses should be $3,270 per month plus $15 per course plus $4 per student. The company's sales should average $800 per student. $4 The company planned to run three courses with a total of 45 students; however, it actually ran three courses with a total of only 42 students. The actual operating results for September were as follows: Actual $ 32,400 $ 9,080 $ 8,540 $ 1,530 $ 4,200 $ 1,890 $ 3,790 Required: Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). Input all amounts as positive values.)
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.
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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 50 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
For example, administrative expenses should be $3,270 per month plus $15 per course plus $4 per student. The company's sales
should average $800 per student.
Expenses:
The company planned to run three courses with a total of 45 students; however, it actually ran three courses with a total of only 42
students. The actual operating results for September were as follows:
Instructor wages
Classroom supplies
Utilities
Campus rent
Insurance
Fixed
Cost per Cost per Cost per
Month
Course
Student
$ 3,080
Administrative expenses
Total expense
Net operating income
$ 870
$ 4,200
$ 1,890
$ 3,270
$
Required:
Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September.
(Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero
varlance). Input all amounts as positive values.)
$
Actual
$ 32,400
$ 9,080
$ 8,540
$ 1,530
$4,200
$ 1,890
$ 3,790
Actual Results
$ 130
$ 15
3
42
32,400
$ 260
9.080
8.540
1,530
4,200
1,890
$4
Gourmand Cooking School
Flexible Budget Performance Report
For the Month Ended September 30
3.790
29,030
3,370
Flexible
Budget
Planning
Budget
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