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 63 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Fixed Cost per Month Revenue Instructor wages Classroom supplies Utilities $ 1,210 $ 4,800 $ 2,400 $ 3,500 Campus rent Insurance Administrative expenses Cost per Course $ 2,930 $ 75 $ 45 For example, administrative expenses should be $3,500 per month plus $45 per course plus $6 per student. The company's sales should average $860 per student. The company planned to run four courses with a total of 63 students; however, it actually ran four courses with a total of only 59 students. The actual operating results for September were as follows: Actual $ 51,280 $ 11,000 Cost per Student $ 18,750 $ 1,920 $ 300 $ 4,800 $ 2,540 $ 3.484 $ 6
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
![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.)
Courses
Students
Revenue
Expenses:
Instructor wages
Classroom supplies
Utilities
Campus rent
Insurance
Administrative expenses
Total expense
Net operating income
Actual Results
$
Gourmand Cooking School
Flexible Budget Performance Report
For the Month Ended September 30
$
4
59
51,280
11,000
18,750
1,920
4,800
2,540
3,484
42,494
8,786
Flexible
Budget
Planning
Budget](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fac06c900-dc52-42b8-b0c3-6a4d7bd22308%2Fa021e396-8b24-4f89-a8c3-5ea4ec6dae78%2F8efup0d_processed.png&w=3840&q=75)
![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 63 students enrolled in those two courses. Data concerning the company's cost formulas
appear below:
Instructor wages
Classroom supplies
Utilities
Campus rent
Insurance
Administrative expenses
Fixed
Cost per
Month
Revenue
Instructor wages
Classroom supplies
Utilities
$ 1,210
$ 4,800
$ 2,400
$ 3,500
Campus rent
Insurance
Administrative expenses
Cost per
Course
$ 2,930
$75
$ 45
For example, administrative expenses should be $3,500 per month plus $45 per course plus $6 per student. The company's sales
should average $860 per student.
Cost per
Student
$300
The company planned to run four courses with a total of 63 students; however, it actually ran four courses with a total of only 59
students. The actual operating results for September were as follows:
Actual
$ 51,280
$ 11,000
$ 18,750
$ 1,920
$ 4,800
$ 2,540
$ 3,484
$6](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fac06c900-dc52-42b8-b0c3-6a4d7bd22308%2Fa021e396-8b24-4f89-a8c3-5ea4ec6dae78%2F9a61sjf_processed.png&w=3840&q=75)
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