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Item 3 2 points

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 61 students enrolled in those two courses. Data concerning the company’s cost formulas appear below: Fixed Cost per Month Cost per Course Cost per
Student Instructor wages $ 2,950 Classroom supplies $ 290 Utilities $ 1,230 $ 75 Campus rent $ 4,900 Insurance $ 2,200 Administrative expenses $ 3,900 $ 43 $ 5

For example, administrative expenses should be $3,900 per month plus $43 per course plus $5 per student. The company’s sales should average $870 per student.

The company planned to run four courses with a total of 61 students; however, it actually ran four courses with a total of only 55 students. The actual operating results for September appear below: Actual Revenue $ 50,170 Instructor wages $ 11,080 Classroom supplies $ 17,540 Utilities $ 1,940 Campus rent $ 4,900 Insurance $ 2,340 Administrative expenses $ 3,803

Required:

Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (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.)

(Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., ze variance). Input all amounts as positive values.) Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 Flexible Budget Planning Budget Actual Results Courses 4 Students 55 $ 50,170 Revenue Expenses Instructor wages 11,080 Classroom supplies 17,540 Utilities 1,940 Campus rent 4,900 Insurance 2,340 Administrative expenses 3,803 Total expense 41,603 8,567 Net operating income