Exercise 9-6 (Algo) Working with More Than One Cost Driver [LO9-2, LO9-3, LO9-5, LO9-6]

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 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 60 students enrolled in those two courses. Data concerning the companys cost formulas appear below:

	Fixed Cost per Month		Cost per Course		Cost per Student
Instructor wages			$	2,970
Classroom supplies					$	310
Utilities	$	1,200	$	65
Campus rent	$	5,200
Insurance	$	2,100
Administrative expenses	$	4,000	$	44	$	3

For example, administrative expenses should be $4,000 per month plus $44 per course plus $3 per student. The companys sales should average $890 per student.

The company planned to run four courses with a total of 60 students; however, it actually ran four courses with a total of only 50 students. The actual operating results for September were as follows:

	Actual
Revenue	$	50,500
Instructor wages	$	11,160
Classroom supplies	$	18,450
Utilities	$	1,870
Campus rent	$	5,200
Insurance	$	2,240
Administrative expenses	$	3,782

Required:

Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September.