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 62 students enrolled in those four courses. Data concerning the company’s cost formulas appear below: Fixed Cost per Month Cost per Course Cost per Student Instructor wages $ 2,930 Classroom supplies $ 270 Utilities $ 1,210 $ 50 Campus rent $ 5,000 Insurance $ 2,300 Administrative expenses $ 3,700 $ 44 $ 5 For example, administrative expenses should be $3,700 per month plus $44 per course plus $5 per student. The company’s sales should average $850 per student. The actual operating results for October appear below: Actual Revenue $ 49,800 Instructor wages $ 11,000 Classroom supplies $ 16,590 Utilities $ 1,820 Campus rent $ 5,000 Insurance $ 2,440 Administrative expenses $ 3,612 Required: 1. The Toque Cooking Academy expects to run four courses with a total of 62 students in October. Prepare the company’s planning budget for this level of activity. (Input all amounts as positive values.) Toque Cooking Academy Planning Budget For the Month Ended October 31 Revenue $ Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income $ 2. The school actually ran four courses with a total of 60 students in October. Prepare the company’s flexible budget for this level of activity. (Input all amounts as positive values.) Toque Cooking Academy Flexible Budget For the Month Ended October 31 Revenue $ Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income $ 3. Calculate the spending variances for all expense items. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Toque Cooking Academy Revenue and Spending Variances. For the Month Ended October 31 Revenue and Spending Variances Revenue $ Expenses: Instructor wages $ Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income $

Explanation / Answer

1) Planning budget( 4 courses and 62 students)

2)Planning Budget ( 4 courses 60 students)

3) Flexible Budget

Revenue($850@62) $52,700 Instructor wages 2930*4 $11,720 Classroom supplies 270*62 $16,740 Utilities 1210+ 4*50     1,410 Campus rent     5,000 insurance     2,300 Administrative expense(3940+44*4+$5*2)    4,426 Total expense $41,596 Net operating income $11,104

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.