Question

The 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 63 students enrolled in those two courses. Data conceming the company's cost formulas appear below: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Fixed Cost Cost per Cost per per Month Course Student S2.930 $ 290 $ 1.220 S 65 $ 4.800 $ 2.200 $ 3,900 541 55 For example, administrative expenses should be $3.900 per month plus $41 per course plus $5 per student. The company's sales should average 5870 per student. The actual operating results for September appear below: Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Actual $51.910 $ 11,000 $ 18, 120 S 1,890 $ 4.800 $ 2.340 $ 3,805 Required: 1. The Gourmand Cooking School expects to run four courses with a total of 63 students in September Complete the company's planning budget for this level of activity Gourmand Cooking School Planning Budget For the Month Ended September 30 Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income

Answer 1

1. Gourmand Cooking School
Planning Budget
For the month Ended September 30
	$
Revenue	54810
($ 870*63)
Instructor wages	11,800
Classroom supplies	18,270
Utilities	1,480
Campus rent	4,800
Insurance	2,200
Administrative expenses	4,379
Total Expense	42,929
Net operating income	11,881
COST SHEET
	Fixed	4 courses	63 students	Total
	$	$	$	$
Instructor wages	-	11,800	-	11,800
Classroom supplies	-	-	18,270	18,270
Utilities	1,220	260	-	1,480
Campus rent	4,800	-	-	4,800
Insurance	2,200	-	-	2,200
Administrative expenses	3,900	164	315	4,379
2. Gourmand Cooking School
Flexible Budget
For the month Ended September 30
	$
Revenue	47850
Instructor wages	11,800
Classroom supplies	15,950
Utilities	1,480
Campus rent	4,800
Insurance	2,200
Administrative expenses	4,339
Total Expense	40,569
Net operating income	7,281
COST SHEET
	Fixed	4 courses	55 students	Total
	$	$	$	$
Instructor wages	-	11,800	-	11,800
Classroom supplies	-	-	15,950	15,950
Utilities	1,220	260	-	1,480
Campus rent	4,800	-	-	4,800
Insurance	2,200	-	-	2,200
Administrative expenses	3,900	164	275	4,339
3. Gourmand Cooking School
Flexible Budget Performance Report
For the month Ended September 30
	Flexible budget	Actual	Revenue and spending variance
	$	$
Revenue	47850	51910	4060	F
Instructor wages	11800	11000	-800	F
Classroom supplies	15950	18120	2170	U
Utilities	1480	1890	410	U
Campus rent	4800	4800	0	NONE
Insurance	2200	2340	140	U
Administrative expenses	4339	3805	-534	F
Total Expense	40,569	41,955	1,386
Net operating income	7,281	9,955	2,674	F