Exercise 8-12 Working with More Than One Cost Driver [LO8-2, LO8-3] The Gourmand Cooking School...
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Exercise 8-12 Working with More Than One Cost Driver [LO8-2, LO8-3] 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 62 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost Cost per Cost per per Month Course Student Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses $2,900 S300 $ 1,230 $5,100 $ 2,000 3,800 $ $ 50 40 S 3 For example, administrative expenses should be $3,800 per month plus $40 per course plus $3 per student. The company's sales should average $860 per student. The actual operating results for September appear below: Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Actual 50,420 10,880 S 18,450 S 1,840 S 5,100 S 2,140 S 3,572
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