Reference no: EM132733162

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 60 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 $2,920

Classroom supplies $310

Utilities $1,230 $75

Campus rent $4,800

Insurance $2,200

Administrative expenses $3,700$40$4

For example, administrative expenses should be $3,700 per month plus $40 per course plus $4 per student. The company's sales should average $860 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 56 students. The actual operating results for September appear below:

ActualRevenue$48,700

Instructor wages$10,960

Classroom supplies$18,450

Utilities$1,940

Campus rent$4,800

Insurance$2,340

Administrative expenses$3,526

Required:

Problem 1. Prepare the company's planning budget for September.

Problem 2. Prepare the company's flexible budget for September.

Problem 3. Calculate the revenue and spending variances for September.