Managerial Accounting
17th Edition
ISBN: 9781260247787
Author: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Publisher: RENT MCG
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Chapter 9, Problem 6E
To determine
Introduction: The difference between the planning budget and the flexible budget is known as activity variance. It arises due to the difference between the planned activity level and the actual activity level.
To prepare: The flexible budget performance report.
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Students have asked these similar questions
2.
The Gourmand Cooking School runs short cooking courses at its small campus.
Management has identified two cost drivers it uses for budgeting purposes-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 Cost per Course Cost per Student
$2,930
$280
$60
$1,240
$4,900
$2,300
$3,600
$46
$7
For example, administrative expenses should be $3,600 per month plus $46 per course
plus $7 per student. The company's sales should average $890 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:
15+
D
The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses for
budgeting purposes-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 60 students enrolled in those two courses. Data concerning the company's cost formulas appear below:
Fixed
Cost per Cost per Cost per
Instructor wages
Classroom supplies
Month
Course
$ 2,930
Student
$ 270
$ 75
Utilities
$ 1,220
Campus rent
$ 4,900
Insurance
$ 2,400
Administrative expenses
$ 3,600
$ 44
$5
For example, administrative expenses should be $3,600 per month plus $44 per course plus $5 per student. The company's sales
should average $870 per student.
The company planned to run four courses with a total of 60 students; however, it actually ran four courses with a total of only 54
students. The actual operating results for September were as follows:
Revenue
Instructor wages
Classroom supplies…
Exercise 9-6 (Algo) Working with More Than One Cost Driver [LO9-2, LO9-3, LO9-5, LO9-6]
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 61 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:
Fixed Cost per Month
Cost per Course
Cost per Student
Instructor wages
$ 2,940
Classroom supplies
$ 290
Utilities
$ 1,220
$ 75
Campus rent
$ 4,900
Insurance
$ 2,000
Administrative expenses
$ 3,600
$ 45
$ 7
For example, administrative expenses should be $3,600 per month plus $45 per course plus $7 per student. The company’s sales should average $860 per student.
The company planned to run four courses with a total of 61 students; however, it actually ran four…
Chapter 9 Solutions
Managerial Accounting
Ch. 9 - Prob. 1QCh. 9 - What is a flexible budget and how does it differ...Ch. 9 - Prob. 3QCh. 9 - Why is it difficult to interpret a difference...Ch. 9 - What is an activity variance and what does it...Ch. 9 - Prob. 6QCh. 9 - Prob. 7QCh. 9 - Prob. 8QCh. 9 - Prob. 9QCh. 9 - Prob. 10Q
Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 2F15Ch. 9 - Prob. 3F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 -
L09-1, LO9-2, LO9-3
Adger Corporation is a...Ch. 9 - Prob. 8F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 10F15Ch. 9 - Prob. 11F15Ch. 9 - Prob. 12F15Ch. 9 - Prob. 13F15Ch. 9 - Prob. 14F15Ch. 9 - Prob. 15F15Ch. 9 - Prob. 1ECh. 9 - Prob. 2ECh. 9 -
EXERCISE 9-3 Revenue and Spending Variances...Ch. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Prob. 9ECh. 9 - Prob. 10ECh. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Prob. 13ECh. 9 - Prob. 14ECh. 9 - Prob. 15ECh. 9 - Prob. 16ECh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24CCh. 9 - Prob. 25CCh. 9 - Prob. 26C
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Similar questions
- 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 $ 1,210 $5,000 $ 2,300 $ 3,900 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Cost per Course $ 2,930 $ 55 Cost per Student $ 41 $3 For example, administrative expenses should be $3,900 per month plus $41 per course plus $3 per student. The company's sales should average $870 per student. $ 270 The company planned to run four courses with a total of 63 students; however, it actually ran four courses with a total of only 55…arrow_forwardExercise 9-6 (Algo) Working with More Than One Cost Driver [LO9-2, LO9-3, LO9-5, LO9-6] 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 61 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 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Courses Students Fixed Cost Cost per per Month Course $ 2,910 Revenue Expenses: $1,230 $ 4,500 $ 2,100 $ 3,900 $ Instructor wages Classroom supplies 1 Itilitias For example, administrative expenses should be $3,900 per month plus $42 per course plus $7 per student. The company's sales should average $880 per…arrow_forwardThe 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 Administrative expenses Cost per Fixed Cost per Month Cost per Course Student 2,940 $ 290 1,210 $ 50 4,700 2,200 3,700 $ 46 $ For example, administrative expenses should be $3,700 per month plus 546 per course plus $4 per student. The company's sales should average $880 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 55 students. The actual operating results for September appear below. Revenue Actual 50,780 Instructor wages $ 11,040…arrow_forward
- 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 60 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 $1,210 $4,600 $ 2,200 $4,000 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Cost per Cost per Course Student $ 2,980 $75 $44 $ 300 For example, administrative expenses should be $4,000 per month plus $44 per course plus $6 per student. The company's sales should average $900 per student. Actual $ 51,100 $11,200 $ 17,850 $ 1,920 $4,600 $ 2,340 $ 3,962 $6 The company planned to run four courses with a total of 60 students;…arrow_forwardThe 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 60 students enrolled fin those two courses. Data conceming the company's cost formulas appear below: Cost per Course $ 2,920 Cost per Student Fixed cost per Month Instructor wages classroom supplies Utilities Campus rent Insurance $ 300 $ 1,210 $ 4,800 $ 2,300 $ 3,800 $75 Administrative expenses $ 40 $ 3 For example, administrative expenses should be $3,800 per month plus $40 per course plus $3 per student. The company's sales should average $870 per student. The company planned to run four courses with a total of 60 students; however, It actually ran four courses with a total of only 58 students. The actual operating results for September appear below: Actual $ 49,300 $ 10,960 $ 17,850 $…arrow_forwardGourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 Planning Budget Flexible Actual Results Budget Courses Students 42 Revenue 32,400 Expenses: Instructor wages 9,080 Classroom supplies 8,540 Utilities 1,530 Campus rent 4,200 Insurance 1,890 Administrative expenses 3,790 Total expense 29,030 Net operating income 3,370 3. %24 %24arrow_forward
- Required: Prepare a flexible budget performance report that shows both revenue and spending variances and activity varlances 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 es For the Month Ended September 30 Flexible Planning Budget Actual Results Budget Courses 3. Students 42 Revenue $4 32,400 Expenses: Instructor wages 9,080 8,540 Classroom supplies Utilitios 1,530 Campus rent 4,200 Insurance 1,890 Administrative expenses 3,790 Total expense 29,030 Net operating income 3,370arrow_forwardThe 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 Cost per Cost per Month Student Course $ 2,910 $ 1,240 $ 4,500 $ 2,100 $ 3,500 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses $ 80 Actual $ 53,170 $ 10,920 $ 17,490 $ 41 For example, administrative expenses should be $3,500 per month plus $41 per course plus $5 per student. The company's sales should average $890 per student. $ 1,970 $ 4,500 $ 2,240 $ 3,405 $ 280 The company planned to run four courses with a total of 63 students;…arrow_forwardThe Gourmand Cooking School 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 two courses in a month and have a total of 60 students enrolled in those two courses. Data concerning the company’s cost formulas appear below: Fixed Cost per Month Cost per Course Cost per Student Instructor wages ... $2930 Classroom supplies ... $290 Utilities ... $1210 $85 Campus rent ... $4,900 Insurance ... $2400 Administrative expenses... $3,600 $45 $7 For example, administrative expenses should be $3,600 per month plus $45 per course plus $7 per student. The company’s sales should average $870 per student. The actual operating results for September appear below: The company planned to run four courses with a total of 60 students ; however , it actually ran four…arrow_forward
- 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 62 students enrolled in those two courses. Data concerning the company’s cost formulas appear below: Fixed Cost per Month Cost per Course Cost per Student Instructor wages $ 2,930 Classroom supplies $ 270 Utilities $ 1,230 $ 65 Campus rent $ 5,200 Insurance…arrow_forwardQuestion 3 ANSWER ALL PARTS OF THE QUESTION 1. Please explain the characteristics of the relevant cost and give two examples of the irrelevant cost. 2. “The Traditional budget enables better cost control within firms”, discuss the previous statement with giving two examples of the main alternative budgets systems that you learn this year. 3. London Manufacturing Limited developed the following standard costs for direct material and direct labour for one of their major products, the 40 litres heavy-duty plastic container. Each container requires the following: Types of Cost Standard quantity Standard price Direct labour 0.2 hours £18 per hour During March, London…arrow_forwardThe 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 Month Cost per Course Cost perStudent Instructor wages $ 2,930 Classroom supplies $ 290 Utilities $ 1,200 $ 85 Campus rent $ 4,900 Insurance $ 2,300 Administrative expenses $ 3,800 $ 41 $ 6 For example, administrative expenses should be $3,800 per month plus $41 per course plus $6 per student. The company’s sales should average $890 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…arrow_forward
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