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 50 students enrolled in those two courses. Data concerning the company's cost formulas appear below Fixed
Cost per Cost per Cost per
Month Course Student
Instructor wages $3,080
Classroom supplies $260
Utilities $ 870 130
Campus rent $ 4,200
Insurance $1,890
Administrative expenses 3,270 $ 15 $ 4
For example, administrative expenses should be $3,270 per month plus $15 per course plus $4 per student. The company's sales should average $800 per student The company planned to run three courses with a total of 45 students; however, it actually ran three courses with a total of only 42 students. The actual operating results for September appear below:
Actual
Revenue $32,400
Instructor wages $ 9,080
Classroom supplies 8,540
Utilities $ 1,530
Campus rent $ 4,200
Insurance $ 1,890
Administrative expenses 3,790
Required: Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September.