udents. 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:
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:
Fixed Cost per Month Cost per Course Cost per Student
Instructor wages $ 2,930
Classroom supplies $ 270
Utilities $ 1,230 $ 65
Campus rent $ 5,200
Insurance $ 2,200
Administrative expenses $ 3,600 $ 42 $ 5
For example, administrative expenses should be $3,600 per month plus $42 per course plus $5 per student. The company’s sales should average $900 per student.
The company planned to run four courses with a total of 62 students; however, it actually ran four courses with a total of only 54 students. The actual operating results for September appear below:
Actual
Revenue $ 52,900
Instructor wages $ 11,000
Classroom supplies $ 16,590
Utilities $ 1,900
Campus rent $ 5,200
Insurance $ 2,340
Administrative expenses $ 3,504
Required:
- Prepare the company’s planning budget for September.
- Prepare the company’s flexible budget for September.
- Calculate the revenue and spending variances for September.
Req 3
Calculate the revenue and spending 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.)
Gourmand Cooking School
Revenue and Spending Variances
For the Month Ended September 30
Actual Results Revenue and Spending Variances Flexible Budget
Courses 4
Students 54
Revenue $52,900 $4,300 F $48,600
Expenses:
Instructor wages 11,000 720 F 11,720
Classroom supplies 16,590 2,010 U 14,580
Utilities 1,900 410 U 1,490
Campus rent 5,200 0 None 5,200
Insurance 2,340 140 U 2,200
Administrative expenses 3,504 534 F 4,038
Total expense 40,534 1,306 U 39,228
Net operating income $12,366 $2,994 F $9,372
I need help figuring out the flexible budget for students and courses
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