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 that 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 64 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:

   

  

For example, administrative expenses should be $3,800 per month plus $43 per course plus $4 per student. The company’s sales should average $870 per student.

  

  

  

The Gourmand Cooking School expects to run four courses with a total of 64 students in September. Complete the company’s planning budget for this level of activity.

      

The school actually ran four courses with a total of 62 students in September. Complete the company’s flexible budget for this level of activity.

      

Complete the flexible budget performance report that shows both revenue and spending variances
and activity 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.)

     

rev: 08_05_2014_QC_51911, 08_28_2014_QC_51911

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers that 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 64 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:

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Planning Budget (4 classes; 60 students) Forumla Amount Revenue 870*64 $55,680 Instructor wages 2940*4 $11,760 Classroom supplies 300*64 $19,200 Utilities 1210*(70*4) $1,490 Campus rent 4900 $4,900 Insurance 2000 $2,000 Administrative expenses 3800+(43*4)+(4*64) $4,228 Total Expense $43,578 Net Operating Income $12,102

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