Please answer those 3 questions The Gourmand Cooking School runs short cooking c

Question

Please answer those 3 questions The Gourmand Cooking School runs short cooking coursos at its small campus. Management has identfied two cost drivers that it uses in its budgeting and performance reports -the number of coursos and the total number of students. For example, the school might run two courses in a month and have a totl of 82 students enrolled in thoso two courses. Data conoeming the oompany's cost formulas appeer below $2,920 290 $ 1,210$75 s 4,900 $ 2,400 Administrative expenses 3,70041 S5 For example, administrative axpenses should be $3,700 per month plus $41 per course plus $5 per student The company's sales should average $860 per student The actual operating results for September appear below $ 50,420 $ 10,960 $17,830 S 1,820 S 4,900 S 2,540 S 3,600 Revenu Instructor wages Campus rent 1. The Gourmand Cooking School expects to run four courses with a total of 62 students in September Complete the company's planning budget for this level of activity Planning Budget For the Month Ended September 30 Revenue Expenses: Instructor wages Classroom supples Campus rent Insurance Administrative expenses

Explanation / Answer

Solution:

Part 1 --

Planning budget is the master budget prepared by estimated activity at the beginning using standard cost.

Planned Courses = 4 and Number of Students 62

Gourmand Cooking School

Planning Budget

For the Month Ended September 30

Revenue (62 Students x $860)

$53,320

Expenses:

Instructor wages (4 Courses x $2,920)

$11,680

Classroom supplies (62*290)

$17,980

Utilities ($1210 + (75*4))

$1,510

Campus rent

$4,900

Insurance

$2,400

Administrative expenses (3700 + (4*41) + (62*5)

$4,174

Total expense

$42,644

Net Operating Income

$10,676

Part 2 --

Flexible Budget is a budget prepared using the actual activity run or performed by the company at standard cost. Hence we will take actual activity performed by the company and standard cost.

Now we need to calculate the Flexible Budget using the actual student ran 60 student and 4 courses

Gourmand Cooking School

Flexible Budget

For the Month Ended September 30

Revenue (60 Students x $860)

$51,600

Expenses:

Instructor wages (4 Courses x $2,920)

$11,680

Classroom supplies (60*290)

$17,400

Utilities ($1210 + (75*4))

$1,510

Campus rent

$4,900

Insurance

$2,400

Administrative expenses (3700 + (4*41) + (60*5)

$4,164

Total expense

$42,054

Net Operating Income

$9,546

Part 3 --

Revenue and spending variance is the difference of Actual Result and Flexible Budget.

Gourmand Cooking School

Flexible Budget Performance Report

For the Month Ended September 30

Actual Result

Flexible Budget (As per above calculation)

Revenue and Spending Variance

Courses

4

4

Students

57

57

Revenue

$50,420

$51,600

$1,180

U

Expenses:

Instructor wages

$10,960

$11,680

$720

F

Classroom supplies

$17,830

$17,400

$430

U

Utilities

$1,920

$1,510

$410

U

Campus rent

$4,900

$4,900

$0

None

Insurance

$2,540

$2,400

$140

U

Administrative expenses

$3,600

$4,164

$564

F

Total expense

$41,750

$42,054

$304

F

Net Operating Income

$8,670

$9,546

$876

U

You need to enter the amount of revenue and spending variance only in the given format of question. Other parts I have given as solution for your understanding.

Gourmand Cooking School

Planning Budget

For the Month Ended September 30

Revenue (62 Students x $860)

$53,320

Expenses:

Instructor wages (4 Courses x $2,920)

$11,680

Classroom supplies (62*290)

$17,980

Utilities ($1210 + (75*4))

$1,510

Campus rent

$4,900

Insurance

$2,400

Administrative expenses (3700 + (4*41) + (62*5)

$4,174

Total expense

$42,644

Net Operating Income

$10,676

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