Exercise 9.6 (Algo) Working with More Than One Cost Driver (LO9-2, LO9-3, LO9-5, L09-6] 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: Instructor vages classroom supplies Utilities Campus rent Insurance Administrative expenses Fixed Cost per Cost per cost per Month Course Student $2,920 $310 $1,240 $ 75 54,800 $2,300 $3,500 $ 41 $ 5 For example, administrative expenses should be $3,500 per month plus $41 per course plus $5 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 59 students. The actual operating results for September were as follows: Actual $54,300 $ 10,960 $ 20.000 Revenue Instructor wages Classdoon supplies Utilities Campus rent Insurance Administrative expenses $ 4.500 $ 2,440 $ 3, 415 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 effectie, zero variance). Input all amounts as positive values.) 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.) Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 Actual Results Flexible Budget Planning Budget 4 Courses Students 59 $ 54,300 Revenue Expenses Instructor wages Classroom supplies Ubilities Campus rent Insurance Administrative expenses Total expenso Net operating income 10,900 20,000 1.950 4,800 2.440 3,415 43,565 10,735 $ Frank Weston, supervisor of the Freemont Corporation's Machining Department, was visibly upset after being reprimanded for his department's poor performance over the prior month. The department's cost control report is given below: Freemont Corporation Machining Department Cont Control Report Yor the Month Ended June 30 Actual Planning Results Budget Variances Machine-hours 42,000 40,000 Direct labor vages 5 80,500 $ 78,400 $2,100 V Supplies 24,800 22,800 2,000 U Maintenance 24,000 21,300 2,700 U Utilities 21,700 20,100 1,600 U Supervision 48,000 48.000 0 Depreciation 81.000 81,000 0 Total $ 280,000 $271,600 $8,400 U Just can't understand all of these unfavorable variances." Weston complained to the supervisor of another department. "When the boss called me in, I thought he was going to give me a pat on the back because I know for a fact that my department worked more efficiently lost month than it has ever worked before. Instead, he tore me apart. I thought for a minute that it might be over the supplies that were stolen out of our warehouse last month. But they only amounted to a couple of hundred dollars, and just look at this report Everything is unfavorable." Direct labor wages and supplies are variable costs; supervision and depreciation are fixed costs; and maintenance and utilities are mixed costs. The fixed component of the budgeted maintenance cost is $14,900; the fixed component of the budgeted utilities cost is $13,500 Required: 2. Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining department. (Round your intermediate calculations to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (ie, zero variance). Input all amounts as positive values.) Freemont Corporation Machining Department Flexible Budget Performance Report For the Month Ended June 30 Actual Flexible Results Budget 42,000 Planning Budget 40,000 Machine-hours Direct labor wagns Supplies Maintenance Utilities Supervision Depreciation Total $ 80.500 24,800 24.000 21,700 48.000 81,000 $ 280,000 $ 78,400 22,800 21,300 20,100 48,000 81,000 $ 271,600