Exercise 9-6 (Algo) Working with More Than One Cost Driver [LO9-2, LO9-3, LO9-5, LO9-6]

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 reportsthe 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 64 students enrolled in those two courses. Data concerning the companys cost formulas appear below:

Fixed Cost per Month	Cost per Course	Cost per Student
Instructor wages		$ 2,910
Classroom supplies			$ 300
Utilities	$ 1,240	$ 85
Campus rent	$ 5,000
Insurance	$ 2,000
Administrative expenses	$ 3,900	$ 41	$ 6

For example, administrative expenses should be $3,900 per month plus $41 per course plus $6 per student. The companys sales should average $900 per student.

The company planned to run four courses with a total of 64 students; however, it actually ran four courses with a total of only 60 students. The actual operating results for September were as follows:

Actual
Revenue	$ 54,700
Instructor wages	$ 10,920
Classroom supplies	$ 19,050
Utilities	$ 1,990
Campus rent	$ 5,000
Insurance	$ 2,140
Administrative expenses	$ 3,874

Required:

Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (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.)

Required:

Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (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.)

	Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 Actual Results Flexible Budget Planning Budget Courses 4 Students 60 Revenue $54,700 Expenses: Instructor wages 10,920 Classroom supplies 19,050 Utilities 1,990 Campus rent 5,000 Insurance 2,140 Administrative expenses 3,874 Total expense 42,974 Net operating income $11,726