The Gourmand Cooking School runs short cooking courses at it

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 Cost per Cost per Mont tudent Instructor wages Claasroom supplier Utilities Campus rent Insurance Administrative expenses 2,940 $290 $1,230 $ 60 $4,700 $2,300 3,700 $ 45 6 For example, administrative expenses should be $3,700 per month plus $45 per course plus $6 per student. The company\'s sales should average $900 per student. The company planned to run four courses with a total of 62 students; however, it actually ran four courses with a total of only 60 students. The actual operating results for September appear below: Revenue Instructor wages Classroom supplies Utilities Canpus rent Insurance Adninistrative expenses Actual 52,900 $11,040 $ 17,830 s 1,880 $ 4,700 s 2,440 S 3,678

Solution

The flexible budget performance report is provided as below:

Gourmand Cooking School
Flexible Budget Performance Report
For the Month Ended September 30
	Actual Results	Revenue and Spending Variances	Flexible Budget	Activity Variances	Planning Budget
Courses	4			4			4
Students	60			60			62
Revenue	52,900	1,100	U	54,000 (900*60)	1,800	U	55,800 (900*62)
Expenses:
Instructor\'s Wages	11,040	720	F	11,760 (2,940*4)	0	None	11,760 (2,940*4)
Classroom Supplies	17,830	430	U	17,400 (290*60)	580	F	17,980 (290*62)
Utilities	1,880	410	U	1,470 (1,230 + 60*4)	0	None	1,470 (1,230 + 60*4)
Campus Rent	4,700	0	None	4,700	0	None	4,700
Insurance	2,440	140	U	2,300	0	None	2,300
Administrative Expenses	3,678	562	F	4,240 (3,700 + 45*4 + 6*60)	12	F	4,252 (3,700 + 45*4 + 6*62)
Total Expense	41,568	302	F	41,870	592	F	42,462
Net Operating Income	$11,332	798	U	$12,130	1,208	U	$13,338