The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses forbudgeting purposes-the number of courses and the total number of students. For example, the school might run two courses in amonth and have a total of 60 students enrolled in those two courses. Data concerning the company's cost formulas appear below:FixedCost per Cost per Cost perInstructor wagesClassroom suppliesMonthCourse$ 2,930Student$ 270$ 75Utilities$ 1,220Campus rent$ 4,900Insurance$ 2,400Administrative expenses$ 3,600$ 44$5For example, administrative expenses should be $3,600 per month plus $44 per course plus $5 per student. The company's salesshould average $870 per student.The company planned to run four courses with a total of 60 students; however, it actually ran four courses with a total of only 54students. The actual operating results for September were as follows:RevenueInstructor wagesClassroom suppliesUtilitiesCampus rent$Actual49,300$ 11,000$ 16,050$ 1,930$4,900Insurance$ 2,540Administrative expenses$ 3,502Required:Prepare a flexible budget performance report for September.Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zerovariance). Input all amounts as positive values.Gourmand Cooking SchoolFlexible Budget Performance ReportFor the Month Ended September 30CoursesStudentsRevenueExpenses:Instructor wagesClassroom suppliesUtilitiesCampus rentInsuranceAdministrative expensesTotal expensesNet operating incomeRevenue andActual ResultsSpending VariancesFlexibleBudgetActivity VariancesPlanningBudget454$49,30011,00016,0501,9304,9002,5403,50239,922$9,378

Budgeting is the process of undertaking plans to spend money. This plan enables the business to…

Required: Prepare a flexible budget performance report for September. Note: 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.

Required: Prepare a flexible budget performance report for September. Note: 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.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 4BE: Activity-based costing: selling and administrative expenses Jungle Junior Company manufactures and...

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