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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: Fixed Cost per Cost per Cost per Month Course Student Instructor wages Classroom supplies Utilities $ 2,940 $ 310 $ 1,230 $ 75 Campus rent $ 4,900 Insurance $ 2,100 Administrative expenses $ 3,700 $ 42 $ 5 For example, administrative expenses should be $3,700 per month plus $42 per course plus $5 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 53 students. The actual operating results for September were as follows: Revenue Actual $ 51,280 Instructor wages $ 11,040 Classroom supplies $ 19,380 Utilities Campus rent $ 1,940 $ 4,900 $ 2,240 $ 3,609 Insurance Administrative expenses 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 < Prev 5 of 5 Next >

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: Fixed Cost per Cost per Cost per Month Course Student Instructor wages Classroom supplies Utilities $ 2,940 $ 310 $ 1,230 $ 75 Campus rent $ 4,900 Insurance $ 2,100 Administrative expenses $ 3,700 $ 42 $ 5 For example, administrative expenses should be $3,700 per month plus $42 per course plus $5 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 53 students. The actual operating results for September were as follows: Revenue Actual $ 51,280 Instructor wages $ 11,040 Classroom supplies $ 19,380 Utilities Campus rent $ 1,940 $ 4,900 $ 2,240 $ 3,609 Insurance Administrative expenses 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 < Prev 5 of 5 Next >

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 20BEA: Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and...
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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: Fixed Cost per Cost per Cost per Month Course Student Instructor wages Classroom supplies Utilities $ 2,940 $ 310 $ 1,230 $ 75 Campus rent $ 4,900 Insurance $ 2,100 Administrative expenses $ 3,700 $ 42 $ 5 For example, administrative expenses should be $3,700 per month plus $42 per course plus $5 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 53 students. The actual operating results for September were as follows: Revenue Actual $ 51,280 Instructor wages $ 11,040 Classroom supplies $ 19,380 Utilities Campus rent $ 1,940 $ 4,900 $ 2,240 $ 3,609 Insurance Administrative expenses 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 < Prev 5 of 5 Next >
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: Fixed Cost per Cost per Cost per Month Course Student Instructor wages Classroom supplies Utilities $ 2,940 $ 310 $ 1,230 $ 75 Campus rent $ 4,900 Insurance $ 2,100 Administrative expenses $ 3,700 $ 42 $ 5 For example, administrative expenses should be $3,700 per month plus $42 per course plus $5 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 53 students. The actual operating results for September were as follows: Revenue Actual $ 51,280 Instructor wages $ 11,040 Classroom supplies $ 19,380 Utilities Campus rent $ 1,940 $ 4,900 $ 2,240 $ 3,609 Insurance Administrative expenses 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 < Prev 5 of 5 Next >
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