Chapter 9, Problem 12E

Working with More Than One Cost Driver
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:

For example, administrative expenses should be 53.270 per month plus S15 per course plus 54 per student. The companys sales should average 5800 per student.
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 appear below:

cRequired:
1. Using Exhibit 9-2 as your guide, prepare the company’s planning budget for September.
2. Using Exhibit 9-5 as your guide. prepare the company’s flexible budget for September.
3. Calculate the revenue and spending variances for September. (Hint: Refer to Exhibit 9−6.)