The Toque Cooking Academy runs short cooking courses at its small campus. Management has identified two cost drivers that it uses in its budgeting and performance reports€”the number of courses and the total number of students. For example, the school might run four courses in a month and have a total of 60 students enrolled in those four courses. Data concerning the company€™s cost formulas appear below:

For example, administrative expenses should be $3,940 per month plus $46 per course plus $7 per student. The company€™s sales should average $850 per student.
The actual operating results for October appear below:
Actual
Revenue . . . . . . . . . . . . . . . . . . . $48,100
Instructor wages . . . . . . . . . . . . . $11,200
Classroom supplies. . . . . . . . . . . $18,450
Utilities . . . . . . . . . . . . . . . . . . . $1,980
Campus rent . . . . . . . . . . . . . . . . $5,100
Insurance . . . . . . . . . . . . . . . . . . $2,480
Administrative expenses . . . . . . . $3,970
Required:
1. The Toque Cooking Academy expects to run four courses with a total of 60 students in October. Prepare the company€™s planning budget for this level of activity.
2. The school actually ran four courses with a total of 58 students in October. Prepare the company€™s flexible budget for this level of activity.
3. Prepare a flexible budget performance report that shows both activity variances and revenue and spending variances forOctober.

Transcribed Image Text:

Fixed Cost Cost per Cost per per month Course Student Instructor wages. Classroom supplies Utilities .. . . Campus rent Insurance Administrative expenses.. $2,980 $310 $1,230 $5,100 $2,340 $3,940 $85 $46 $7