Gourmand cooking school

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Reference no: EM13925765

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers that 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 64 students enrolled in those two courses. Data concerning the company's cost formulas appear below:

 

Fixed Cost per Month

Cost per Course

Cost per
Student

  Instructor wages

 

 

$

2,960

 

 

  Classroom supplies

 

 

 

 

$

280   

  Utilities

$

1,250   

$

55

 

 

  Campus rent

$

4,700   

 

 

 

 

  Insurance

$

2,000   

 

 

 

 

  Administrative expenses

$

3,700   

$

41

$

5   

 

For example, administrative expenses should be $3,700 per month plus $41 per course plus $5 per student. The company's sales should average $890 per student.

The actual operating results for September appear below:

Revenue

$

54,060

  Instructor wages

$

11,120

  Classroom supplies

$

17,770

  Utilities

$

1,880

  Campus rent

$

4,700

  Insurance

$

2,140

  Administrative expenses

$

3,610

 

1. The Gourmand Cooking School expects to run four courses with a total of 64 students in September. Complete the company's planning budget for this level of activity.

2. The school actually ran four courses with a total of 58 students in September. Complete the company's flexible budget for this level of activity.

Reference no: EM13925765

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