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 60 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 Cost Cost per per per Month Course Student $2,900 $280 $1,220 $ 75 $5,000 $2,200 $3,900 $ 44 $ 5 For example, administrative expenses should be $3,900 per month plus $44 per course plus $5 per student. The company's sales should average $900 per student. The company planned to run four courses with a total of 60 students; however, it actually ran four courses with a total of only 54 students. The actual operating results for September appear below: Actual Revenue $51,100 Instructor wages $10,880 Classroom supplies $16,650 Utilities $ 1,930 Campus rent $ 5,000 Insurance $ 2,340 Administrative $ 3,802 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.) Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 Actual Flexible Results Budget 4 54| Planning Budget Courses Students $ 51,100 | Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income 10,880 16,650 1,930 5,000 2,340 3,802 40,602 10,498 $
