The Toque Cooking Academy runs short cooking courses at its small campus. Manage

Question

The Toque Cooking Academy 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 four courses in a month and have a total of 65 students enrolled in those four courses. Data concerning the company’s cost formulas appear below:

   

  

For example, administrative expenses should be $4,000 per month plus $42 per course plus $7 per student. The company’s sales should average $860 per student.

   

     

    

The Toque Cooking Academy expects to run four courses with a total of 65 students in October. Complete the company’s planning budget for this level of activity.

$12,920

The school actually ran four courses with a total of 63 students in October. Complete the company’s flexible budget for this level of activity.

Complete the flexible budget performance report that shows both activity variances and revenue and spending variances for October. (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.)

The Toque Cooking Academy 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 four courses in a month and have a total of 65 students enrolled in those four courses. Data concerning the company’s cost formulas appear below:

Explanation / Answer

Please correct your planned and Flexible budget through following since there are parts which are wrong

Actual results Revenue & spending Flexible budget Activity variance Planning budget Revenue 53,000 1180(U) 54,180 1720(U) 55,900 Expenses Instructor wages 10,960 720 (F) 11,680 0 11,680 Classroom 18,050 410(U) 17,640 560(F) 18,200 Utilties 1,950 450(U) 1,500 0 1,500 Campus rent 4,900 - 4,900 - 4,900 insurance 2,440 140(U) 2,300 - 2,300 Administration 4,049 560(F) 4,609 14(F) 4,623 total expense 42,349 280(F) 42,629 574(F) 43,203 Net operating income 10,651 900(U) 11,551 1146(U) 12,697

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