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 61 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost per Cost per Cost per Month Course Student $2,988 Instructor wages Classroom supplies Utilities $290 $1,230 $ 75 Campus rent $4,700 Insurance $2,000 Administrative expenses $3,700 $ 40 $ 5 For example, administrative expenses should be $3,700 per month plus $40 per course plus $5 per student. The company's sales should average $900 per student. The company planned to run four courses with a total of 61 students; however, it actually ran four courses with a total of only 57 students. The actual operating results for September appear below: Actual $52,000 Revenue $11,200 Instructor wages Classroom supplies Utilities $17,540 $ 1,940 Campus rent $ 4,700 Insurance $ 2,140 Administrative expenses $ 3,591 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 Actual Results Planning Budget Budget 4 Courses Students Revenue $ Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income $ 57 52,000 11,200 17,540 1,940 4,700 2,140 3,591 41,111 10,889 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 61 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost per Cost per Cost per Month Course Student $2,988 Instructor wages Classroom supplies Utilities $290 $1,230 $ 75 Campus rent $4,700 Insurance $2,000 Administrative expenses $3,700 $ 40 $ 5 For example, administrative expenses should be $3,700 per month plus $40 per course plus $5 per student. The company's sales should average $900 per student. The company planned to run four courses with a total of 61 students; however, it actually ran four courses with a total of only 57 students. The actual operating results for September appear below: Actual $52,000 Revenue $11,200 Instructor wages Classroom supplies Utilities $17,540 $ 1,940 Campus rent $ 4,700 Insurance $ 2,140 Administrative expenses $ 3,591 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 Actual Results Planning Budget Budget 4 Courses Students Revenue $ Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income $ 57 52,000 11,200 17,540 1,940 4,700 2,140 3,591 41,111 10,889
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Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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