Prepare a flexible budget performance report

Reference no: EM133015716

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 64 students enrolled in those two courses. Data concerning the company's cost formulas appear below:

Fixed Cost per MonthCost per CourseCost per

StudentInstructor wages $2,970 Classroom supplies $270 Utilities$1,210$55 Campus rent$4,900 Insurance$2,000 Administrative expenses$3,800$45$6

For example, administrative expenses should be $3,800 per month plus $45 per course plus $6 per student. The company's sales should average $880 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 56 students. The actual operating results for September appear below:

ActualRevenue$53,420Instructor wages$11,160Classroom supplies$17,130Utilities$1,840Campus rent$4,900Insurance$2,140Administrative expenses$3,790

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.)

Reference no: EM133015716

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