Ch 9 6 The Gourmand Cooking School runs short cooking courses at its small campu
ID: 2511999 • Letter: C
Question
Ch 9 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 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 61 students enrolled in those two courses. Data concerning the company's cost formulas appear below: rse Instructor wages Classroom supplies Utilities Campus rent Insurance 1,210 $60 5,080 2,200 $3,600 45$4 5,6069$260 For example, administrative expenses should be $3.600 per month plus $45 per course plus $4 per student The should average $900 per student. The company planned to run four courses with a total of 61 students however. it actually ran four courses with a total of only 57 students. The actual operating results for September appear below: s 52,009 5 11,120 15,718 $ 1,860 $ 5,000 s 2,340 $ 3,450 Classroon supplies Canpus rent Insurance Pray8 or 9 Next >Explanation / Answer
Actual Revenue & spending Flexible Activity variance planning Results Variance budget budget Courses 4 4 4 Students 57 57 61 Revenues 52,000 700 F 51300 3600 U 54900 Expenses Instructor wages 11,120 720 F 11840 0 N 11840 Classroom supplies 15,710 890 U 14820 1040 F 15860 Utilities 1,860 410 U 1450 0 N 1450 Campus rent 5,000 0 N 5,000 0 N 5,000 insurance 2,340 140 U 2,200 0 N 2,200 Administrative expenses 3,450 558 F 4008 16 F 4024 total expense 39,480 162 U 39318 1056 F 40374 net operating income 12,520 538 F 11982 2544 U 14526