The Gourmand Cooking School runs short cooking courses at itssmall campus. Management has identified two cost drivers it uses inits budgeting and performance reports—the number of courses and thetotal number of students. For example, the school might run twocourses in a month and have a total of 61 students enrolled inthose two courses. Data concerning the company’s cost formulasappear below:
| Fixed Cost per Month | Cost per Course | Cost per
Student |
| Instructor wages | | | $ | 2,940 | | | |
| Classroom supplies | | | | | $ | 270 | |
| Utilities | $ | 1,200 | $ | 80 | | | |
| Campus rent | $ | 4,800 | | | | | |
| Insurance | $ | 2,100 | | | | | |
| Administrative expenses | $ | 3,900 | $ | 42 | $ | 4 | |
|
For example, administrative expenses should be $3,900 per monthplus $42 per course plus $4 per student. The company’s sales shouldaverage $880 per student.
The company planned to run four courses with a total of 61students; however, it actually ran four courses with a total ofonly 57 students. The actual operating results for September appearbelow:
| Actual |
| Revenue | $ | 50,780 |
| Instructor wages | $ | 11,040 |
| Classroom supplies | $ | 16,320 |
| Utilities | $ | 1,930 |
| Campus rent | $ | 4,800 |
| Insurance | $ | 2,240 |
| Administrative expenses | $ | 3,738 |
|
Required:
Prepare a flexible budget performance report that shows bothrevenue and spending variances and activity variances forSeptember. (Indicate the effect of each variance byselecting "F" for favorable, "U" for unfavorable, and "None" for noeffect (i.e., zero variance). Input all amounts as positivevalues.)
