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 62 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost per Cost per Cost per Month Student Course $ 2,980 Instructor wages Classroom supplies $ 300 Utilities $ 65 Campus rent $1,220 $ 5,100 $ 2,200 $ 3,700 Insurance Administrative expenses $ 46 $ 4 For example, administrative expenses should be $3,700 per month plus $46 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 62 students; however, it actually ran four courses with a total of only 56 students. The actual operating results for September were as follows: Actual Revenue $ 51,660 $ 11, 200 Instructor wages Classroom supplies $ 18,450 Utilities $ 1,890 Campus rent $ 5,100 Insurance $ 2,340 Administrative expenses $ 3,558 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 Flexible Planning Actual Results Budget Budget Courses 4 Students 56 Revenue $ 51,660 Expenses: 11,200 18,450 1,890 5,100 2,340 3,558 42,538 9,122 Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income $ 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 62 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost per Cost per Cost per Month Student Course $ 2,980 Instructor wages Classroom supplies $ 300 Utilities $ 65 Campus rent $1,220 $ 5,100 $ 2,200 $ 3,700 Insurance Administrative expenses $ 46 $ 4 For example, administrative expenses should be $3,700 per month plus $46 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 62 students; however, it actually ran four courses with a total of only 56 students. The actual operating results for September were as follows: Actual Revenue $ 51,660 $ 11, 200 Instructor wages Classroom supplies $ 18,450 Utilities $ 1,890 Campus rent $ 5,100 Insurance $ 2,340 Administrative expenses $ 3,558 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 Flexible Planning Actual Results Budget Budget Courses 4 Students 56 Revenue $ 51,660 Expenses: 11,200 18,450 1,890 5,100 2,340 3,558 42,538 9,122 Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income $
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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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