The Gourmand Cooking School runs short cooking courses at its small campus. Mana

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 62 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost per Cost per Cost per Month CourseStudent $2,970 Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses $270 $1,220 50 $5,200 $2,200 $3,600 40 $5 For example, administrative expenses should be $3,600 per month plus $40 per course plus $5 per student. The company's sales should average $880 per student. The company planned to run four courses with a total of 62 students; however, it actually ran four courses with a total of only 54 students. The actual operating results for September appear below:

Explanation / Answer

Actual results Revenue and spending variances Flexible budget Activity variances Planning budget Courses 4 4 4 Students 54 54 62 Revenue 51660 4140 F 47520 7040 U 54560 Expenses: Instructor wages 11160 720 F 11880 0 None 11880 Classroom supplies 16590 2010 U 14580 2160 F 16740 Utilities 1830 410 U 1420 0 None 1420 Campus rent 5200 0 None 5200 0 None 5200 Insurance 2340 140 U 2200 0 None 2200 Administrative expenses 3496 534 F 4030 40 F 4070 Total expense 40616 1306 U 39310 2200 F 41510 Net operating income 11044 2834 F 8210 4840 U 13050

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

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