Reference no: EM13598334

The Gourmand cooking school runs short cooking courses at its small campus. Management has identified two cost drivers that 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 month cost per course cost per student
• Instructor wages----------------------------------------------------------$3,080.00
• Classroom Supplies--------------------------------------------------------$260.00
• Utilities-------------------------$870.00--------------$130.00
• Campus rent--------------------$4,200.00
• Insurance---------------------$1,890.00
• Administrative expenses--------$3,270.00--------------$15.00-------------$4.00

For example, administrative expenses should be $3,270.00 per month plus $15.00 per course plus $4.00 per student. The company sales should average $800.00 per student.
The actual operating results for September appear below:
Actual

• Revenue--------------------------------------------------------------$32,400.00
• Instructor wages---------------------------------------------------$9,080.00
• Classroom supplies------------------------------------------------$8,540.00
• Utilities----------------------------------------------------------------$1,530.00
• Campus Rent---------------------------------------------------------$4,200.00
• Insurance--------------------------------------------------------------$1,890.00
• Administrative expenses------------------------------------------$3,790.00

Required:
1. The Gourmand Cooking School expects to run three courses with a total of 45 students in September.
Prepare the company's planning budget for this level of activity.
2. The School actually ran three courses with a total of 42 students in September. Prepare the company's flexible budget for this level of activity.
3. Prepare a flexible budget performance report that shows both activity variances and revenue and spending variances for September.