Exercise 9-18 Working with More Than One Cost Driver [LO9-4, LO9-5]

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 reportsthe 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 companys cost formulas appear below:

Fixed Cost Cost per Cost per per Month Course Student Instructor wages $2,930 $270 Classroom supplies Utilities 1,210 90 5,000 Campus rent 2,300 Insurance Administrative expenses 3,500 43 4 For example, administrative expenses should be $3,500 per month plus $43 per course plus $4 per student. The company's sales should average $860 per student. The actual operating results for September appear below: Actual $50,420 Revenue 11,000 Instructor wages Classroom supplies 16,590 1,980 Utilities 5,000 Campus rent 2,440 Insurance 3,346 Administrative expenses