The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two...
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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 65 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost per Cost per Month Course Cost per Student $ 2,970 Instructor wages Classroom supplies Utilities $260 $1,250 $ 70 Campus rent $5,100 Insurance $2,100 Administrative expenses $3,600 $ 45 $ 4 For example, administrative expenses should be $3,600 per month plus $45 per course plus $4 per student. The company's sales should average $880 per student. The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 61 students. The actual operating results for September appear below: Actual $ 54,300 Revenue $ 11,160 Instructor wages Classroom supplies Utilities $ 16,750 $ 1,940 Campus rent $ 5,100 Insurance $ 2,240 Administrative expenses $ 3,466 Required: Prepare a 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.) Courses Students Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 Flexible Budget Actual Results 4 61 $ 54,300 11,160 16,750 1,940 5,100 2,240 3,466 40,656 13,644 Planning Budget 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 65 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost per Cost per Month Course Cost per Student $ 2,970 Instructor wages Classroom supplies Utilities $260 $1,250 $ 70 Campus rent $5,100 Insurance $2,100 Administrative expenses $3,600 $ 45 $ 4 For example, administrative expenses should be $3,600 per month plus $45 per course plus $4 per student. The company's sales should average $880 per student. The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 61 students. The actual operating results for September appear below: Actual $ 54,300 Revenue $ 11,160 Instructor wages Classroom supplies Utilities $ 16,750 $ 1,940 Campus rent $ 5,100 Insurance $ 2,240 Administrative expenses $ 3,466 Required: Prepare a 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.) Courses Students Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 Flexible Budget Actual Results 4 61 $ 54,300 11,160 16,750 1,940 5,100 2,240 3,466 40,656 13,644 Planning Budget
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Budget The budget is a plan which is prepared for a specific period for expenditures or incomes rela... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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