The Gourmand Cooking School runs short cooking courses at its small campus. Mana

Question

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 Cost per Cost per per Month Course Stude Instructor wages Classroom supplies Utilities Campus rent Insurance $ 2,97 $ 270 $1,250 60 $4,508 $ 2,300 3,700 44 5 For example, administrative expenses should be $3,700 per month plus $44 per course plus $5 per student. The company's sales should average $860 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 56 students. The actual operating results for September appear below Instructor wages Classroon supplies Utilitiers Campus rent 5 5e,428 s 11,160 5 16,590 5 1,98 5 4,58e 5 2,440 3,612 Adeinistrative expenses Required: Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September (Indicate the effect of each veriance by selecting "F" for fevorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance). Input all emounts es positive velues) Flexible Budget Performance Report 30 Flexible Actual Ress

Explanation / Answer

Actual Revenue and spending variances Felxible budget Activity variances Planning budget Courses 4 4 4 Students 56 56 62 Revenue 50420 2260 F 48160 5160 U 53320 Expenses: Instructor wages 11160 720 F 11880 0 None 11880 Classroom supplies 16590 1470 U 15120 1620 F 16740 Utilities 1900 410 U 1490 0 None 1490 Campus rent 4500 0 None 4500 0 None 4500 Insurance 2440 140 U 2300 0 None 2300 Administrative expense 3612 544 F 4156 30 F 4186 Total expenses 40202 756 U 39446 1650 F 41096 Net operating income 10218 1504 F 8714 3510 U 12224

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