Question

Exercise 9-18 Working with More Than One Cost Driver (LO9-2, LO9-3, LO9-4, LO9-5) 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 64 students enrolled in those two courses. Data concerning the company's cost formulas appear below: es Instructor wages classroom supplies Utilities Campus rent Insurance Administrative expenses Pixed Cost per Cost per cost per Month Course Student $ 2,910 $ 280 $1,220 $ 90 $4,900 $2,100 $3,900 $ 44 $ 5 For example, administrative expenses should be $3.900 per month plus $44 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 64 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 Campus rent Insurance Administrative expenses Actual $ 52,140 $ 10,920 $ 17, 770 $ 1,990 $ 4,900 $ 2,240 $ 3,822

Answer 1

Solution: