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The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost driv budgeting purposes-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:

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost driv budgeting purposes-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:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses for budgeting purposes-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: Fixed Cost per Cost per Cost per Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Month Course $ 3,080 Student $ 260 $ 870 $ 4,200 $ 1,890 $ 3,270 $ 130 $ 15 $ 4 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. 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 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Required: $ 8,540 $ 1,530 $ 4,200 $ 1,890 $ 3,790 Prepare a flexible budget performance report for September. Note: 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.
Transcribed Image Text:The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses for budgeting purposes-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: Fixed Cost per Cost per Cost per Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Month Course $ 3,080 Student $ 260 $ 870 $ 4,200 $ 1,890 $ 3,270 $ 130 $ 15 $ 4 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. 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 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Required: $ 8,540 $ 1,530 $ 4,200 $ 1,890 $ 3,790 Prepare a flexible budget performance report for September. Note: 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.
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