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 65 students enrolled in those two courses. Dat concerning the company's cost formulas appear below: Instructor vages Classroom supplies utilities Campus rent Insurance Administrative expenses Fixed Cost per Hooth $1,250 $4,900 $2,100 $3,700 Cost per Course 2,960 $80 Coat per Student $300 5.45 14 For example, administrative expenses should be $3,700 per month plus $45 per course plus $4 per student. The company's sales should average $890 per student. The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 61 students. The actual operating results for September appear below.
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 65 students enrolled in those two courses. Dat concerning the company's cost formulas appear below: Instructor vages Classroom supplies utilities Campus rent Insurance Administrative expenses Fixed Cost per Hooth $1,250 $4,900 $2,100 $3,700 Cost per Course 2,960 $80 Coat per Student $300 5.45 14 For example, administrative expenses should be $3,700 per month plus $45 per course plus $4 per student. The company's sales should average $890 per student. The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 61 students. The actual operating results for September appear below.
Managerial Accounting: The Cornerstone of Business Decision-Making
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Chapter13: Emerging Topics In Managerial Accounting
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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.
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Transcribed Image Text: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 65 students enrolled in those two courses. Data
concerning the company's cost formulas appear below.
Fixed Coat per
Hooth
Revenue
Instructor vages
Classroon supplies
Utilities
Caspus reet
Insurance
Administrative expe
cost per Course
$ 2,940
$10
Instructor vages
Classroom supplies
utilities
Campus rent
$1,250
$ 4,900
Insurance
$ 2,100
Administrative expenses
$ 3,700
5:45
For example, administrative expenses should be $3,700 per month plus $45 per course plus $4 per student. The company's sales should average $890 per student.
The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 61 students. The actual operating results for
September appear below:
Actual
$ 54,950
$11.120
$19,350
$1,900
84,900
$2,240
Cost per
Student
$ 300
Required:
1. Prepare the company's planning budget for September.
2. Prepare the company's flexible budget for September
3. Calculate the revenue and spending variances for September.
54
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