The Toque Cooking Academy runs short cooking courses at itssmall campus. Management has identified two cost drivers that ituses in its budgeting and performance reportsâthe number of coursesand the total number of students. For example, the school might runfour courses in a month and have a total of 63 students enrolled inthose four courses. Data concerning the companyâs cost formulasappear below:
Fixed Cost
per Month Cost perCourse Cost per Student Instructor wages $ 2,900 Classroom supplies $ 280 Utilities $ 1,240 $ 75 Campus rent $ 4,800 Insurance $ 2,300 Administrative expenses $ 3,800 $ 43 $ 4
For example, administrative expenses should be $3,800 per monthplus $43 per course plus $4 per student. The companyâs sales shouldaverage $860 per student.
The actual operating resultsfor October appear below:
Actual Revenue $ 51,280 Instructor wages $ 10,880 Classroom supplies $ 17,490 Utilities $ 1,950 Campus rent $ 4,800 Insurance $ 2,440 Administrative expenses $ 3,650
Required: 1. The Toque Cooking Academy expects to run four courses with atotal of 63 students in October. Prepare the companyâs planningbudget for this level of activity. (Input all amounts aspositive values.)
Toque Cooking Academy
Planning Budget
For the Month Ended October 31 Revenue $ Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Netoperating income $
2. The school actually ran four courses with a total of 61 studentsin October. Prepare the companyâs flexible budget for this level ofactivity. (Input all amounts as positivevalues.)
Toque Cooking Academy
Flexible Budget
For the Month Ended October 31 Revenue $ Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Netoperating income $
3. Calculate the spending variances for all expense items.(Input all amounts as positive values. Leave no cells blank- be certain to enter "0" wherever required. Indicate the effect ofeach variance by selecting "F" for favorable, "U" for unfavorable,and "None" for no effect (i.e., zero variance).)
Toque Cooking Academy
Revenue and Spending Variances.
For the Month Ended October 31 Revenue and SpendingVariances Revenue $ (Click to select)UFNone Expenses: Instructor wages $ (Click to select)UFNone Classroom supplies (Click to select)UFNone Utilities (Click to select)FUNone Campus rent (Click to select)FUNone Insurance (Click to select)FUNone Administrative expenses (Click to select)FUNone Total expense (Click to select)FUNone Netoperating income $ (Click to select)UFNone
The Toque Cooking Academy runs short cooking courses at itssmall campus. Management has identified two cost drivers that ituses in its budgeting and performance reportsâthe number of coursesand the total number of students. For example, the school might runfour courses in a month and have a total of 63 students enrolled inthose four courses. Data concerning the companyâs cost formulasappear below:
Fixed Cost per Month | Cost perCourse | Cost per Student | ||||
Instructor wages | $ 2,900 | |||||
Classroom supplies | $ 280 | |||||
Utilities | $ | 1,240 | $ 75 | |||
Campus rent | $ | 4,800 | ||||
Insurance | $ | 2,300 | ||||
Administrative expenses | $ | 3,800 | $ 43 | $ 4 | ||
For example, administrative expenses should be $3,800 per monthplus $43 per course plus $4 per student. The companyâs sales shouldaverage $860 per student. |
The actual operating resultsfor October appear below: |
Actual | ||
Revenue | $ | 51,280 |
Instructor wages | $ | 10,880 |
Classroom supplies | $ | 17,490 |
Utilities | $ | 1,950 |
Campus rent | $ | 4,800 |
Insurance | $ | 2,440 |
Administrative expenses | $ | 3,650 |
Required: | |
1. | The Toque Cooking Academy expects to run four courses with atotal of 63 students in October. Prepare the companyâs planningbudget for this level of activity. (Input all amounts aspositive values.) |
Toque Cooking Academy Planning Budget For the Month Ended October 31 | |
Revenue | $ |
Expenses: | |
Instructor wages | |
Classroom supplies | |
Utilities | |
Campus rent | |
Insurance | |
Administrative expenses | |
Total expense | |
Netoperating income | $ |
2. | The school actually ran four courses with a total of 61 studentsin October. Prepare the companyâs flexible budget for this level ofactivity. (Input all amounts as positivevalues.) |
Toque Cooking Academy Flexible Budget For the Month Ended October 31 | |
Revenue | $ |
Expenses: | |
Instructor wages | |
Classroom supplies | |
Utilities | |
Campus rent | |
Insurance | |
Administrative expenses | |
Total expense | |
Netoperating income | $ |
3. | Calculate the spending variances for all expense items.(Input all amounts as positive values. Leave no cells blank- be certain to enter "0" wherever required. Indicate the effect ofeach variance by selecting "F" for favorable, "U" for unfavorable,and "None" for no effect (i.e., zero variance).) |
Toque Cooking Academy Revenue and Spending Variances. For the Month Ended October 31 | ||
Revenue and SpendingVariances | ||
Revenue | $ | (Click to select)UFNone |
Expenses: | ||
Instructor wages | $ | (Click to select)UFNone |
Classroom supplies | (Click to select)UFNone | |
Utilities | (Click to select)FUNone | |
Campus rent | (Click to select)FUNone | |
Insurance | (Click to select)FUNone | |
Administrative expenses | (Click to select)FUNone | |
Total expense | (Click to select)FUNone | |
Netoperating income | $ | (Click to select)UFNone |