Question

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 50 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 $3,080 $260 Utilities $ $ 4,200 $1,890 870 130 Campus rent Insurance Administrative expenses $ 4 3,270 $ 15 For example, administrative expenses should be $3,270 per month plus $15 per course plus $4 per student. The company's sales should average $800 per student The company planned to run three courses with a total of 45 students; however, it actually ran three courses with a total of only 42 students. The actual operating results for September appear below: Actual $32,400 $ 9,080 8,540 $ 1,530 $ 4,200 $ 1,890 3,790 Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses

Answer 1

		Actual	Revenue & spending		Flexible	Activity variance		planning
		Results	Variance		budget			budget
Courses		3			3			3
Students		42			42			45
Revenues		32,400	1,200	U	33600	2400	U	36000
Expenses
Instructor wages		9,080	160	F	9240	0	N	9240
Classroom supplies		8,540	2,380	F	10920	780	F	11700
Utilities		1,530	270	U	1260	0	N	1260
Campus rent		4,200	0	N	4,200	0	N	4,200
insurance		1,890	0	N	1,890	0	N	1,890
Administrative expenses		3,790	292	U	3483	12	F	3495
total expense		29,030	5,188	F	30993	792	F	31785
net operating income		3,370	763	F	2607	1608	U	4215