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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 63 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Fixed Cost per Month Revenue Instructor wages Classroom supplies Utilities $ 1,210 $ 4,800 $ 2,400 $ 3,500 Campus rent Insurance Administrative expenses Cost per Course $ 2,930 $ 75 $ 45 For example, administrative expenses should be $3,500 per month plus $45 per course plus $6 per student. The company's sales should average $860 per student. The company planned to run four courses with a total of 63 students; however, it actually ran four courses with a total of only 59 students. The actual operating results for September were as follows: Actual $ 51,280 $ 11,000 Cost per Student $ 18,750 $ 1,920 $ 300 $ 4,800 $ 2,540 $ 3.484 $ 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 63 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Fixed Cost per Month Revenue Instructor wages Classroom supplies Utilities $ 1,210 $ 4,800 $ 2,400 $ 3,500 Campus rent Insurance Administrative expenses Cost per Course $ 2,930 $ 75 $ 45 For example, administrative expenses should be $3,500 per month plus $45 per course plus $6 per student. The company's sales should average $860 per student. The company planned to run four courses with a total of 63 students; however, it actually ran four courses with a total of only 59 students. The actual operating results for September were as follows: Actual $ 51,280 $ 11,000 Cost per Student $ 18,750 $ 1,920 $ 300 $ 4,800 $ 2,540 $ 3.484 $ 6

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 57P: Identifying Fixed, Variable, Mixed, and Step Costs Consider each of the following independent...
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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.) Courses Students Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income Actual Results $ Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 $ 4 59 51,280 11,000 18,750 1,920 4,800 2,540 3,484 42,494 8,786 Flexible Budget Planning Budget
Transcribed Image Text: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.) Courses Students Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income Actual Results $ Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 $ 4 59 51,280 11,000 18,750 1,920 4,800 2,540 3,484 42,494 8,786 Flexible Budget Planning Budget
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 63 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Fixed Cost per Month Revenue Instructor wages Classroom supplies Utilities $ 1,210 $ 4,800 $ 2,400 $ 3,500 Campus rent Insurance Administrative expenses Cost per Course $ 2,930 $75 $ 45 For example, administrative expenses should be $3,500 per month plus $45 per course plus $6 per student. The company's sales should average $860 per student. Cost per Student $300 The company planned to run four courses with a total of 63 students; however, it actually ran four courses with a total of only 59 students. The actual operating results for September were as follows: Actual $ 51,280 $ 11,000 $ 18,750 $ 1,920 $ 4,800 $ 2,540 $ 3,484 $6
Transcribed Image Text: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 63 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Fixed Cost per Month Revenue Instructor wages Classroom supplies Utilities $ 1,210 $ 4,800 $ 2,400 $ 3,500 Campus rent Insurance Administrative expenses Cost per Course $ 2,930 $75 $ 45 For example, administrative expenses should be $3,500 per month plus $45 per course plus $6 per student. The company's sales should average $860 per student. Cost per Student $300 The company planned to run four courses with a total of 63 students; however, it actually ran four courses with a total of only 59 students. The actual operating results for September were as follows: Actual $ 51,280 $ 11,000 $ 18,750 $ 1,920 $ 4,800 $ 2,540 $ 3,484 $6
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