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: Instructor wages Classroom supplies Utilities Campus rent Insurance. $1,210 $4,900 $2,200 Administrative expenses $3,600 $45 For example, administrative expenses should be $3,600 per month plus $45 per course plus $4 per student. The company's sales. should average $860 per student. Revenue Instructor wages Classroom supplies Utilities Fixed Cost per Month Cost per Course Cost per Student $ 2,920 The company planned to run four courses with a total of 61 students; however, it actually ran four courses with a total of only 59 students. The actual operating results for September were as follows: Campus rent $1,880 $ 4,900 $ 2,340 Administrative expenses $3,450 Insurance $65 Actual $ 49,560 $ 10,960 $ 18,150 $300 $4 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.)
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: Instructor wages Classroom supplies Utilities Campus rent Insurance. $1,210 $4,900 $2,200 Administrative expenses $3,600 $45 For example, administrative expenses should be $3,600 per month plus $45 per course plus $4 per student. The company's sales. should average $860 per student. Revenue Instructor wages Classroom supplies Utilities Fixed Cost per Month Cost per Course Cost per Student $ 2,920 The company planned to run four courses with a total of 61 students; however, it actually ran four courses with a total of only 59 students. The actual operating results for September were as follows: Campus rent $1,880 $ 4,900 $ 2,340 Administrative expenses $3,450 Insurance $65 Actual $ 49,560 $ 10,960 $ 18,150 $300 $4 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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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 61 students enrolled in those two courses. Data concerning the company's cost formulas
appear below:
Instructor wages
Classroom supplies
Utilities
Campus rent
Insurance
$ 4,900
$2,200
Administrative expenses $3,600
$ 45
For example, administrative expenses should be $3,600 per month plus $45 per course plus $4 per student. The company's sales
should average $860 per student.
Revenue
Actual
$ 49,560
$ 10,960
$ 18,150
$ 1,880
$ 4,900
$ 2,340
Administrative expenses $3,450
Instructor wages
Classroom supplies
Fixed Cost per Month Cost per Course Cost per Student
$ 2,920
Utilities
$1,210
The company planned to run four courses with a total of 61 students; however, it actually ran four courses with a total of only 59
students. The actual operating results for September were as follows:
Campus rent
Insurance
$ 65
$ 300
$4
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.)
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