1. The Toque Cooking Academy runs short cooking courses at its small campus

The Toque Cooking Academy 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 four courses in a month and have a total of 60 students enrolled in those four courses. Data concerning the company’s cost formulas appear below:

Fixed Cost per Month Cost per Course Cost per Student

Instructor wages $2,920

Classroom supplies $270

Utilities $1,230 $65

Campus rent $5,000

Insurance $2,100

Administrative expenses $3,800 $43 $4

For example, administrative expenses should be $3,800 per month plus $43 per course plus $4 per student. The company’s sales should average $890 per student.

The actual operating results for October appear below:

Actual

Revenue $50,500

Instructor wages $10,960

Classroom supplies $16,050

Utilities $1,900

Campus rent $5,000

Insurance $2,240

Administrative expenses $3,638

Required:

1. The Toque Cooking Academy expects to run four courses with a total of 60 students in October. 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 October. Complete the company’s flexible budget for this level of activity.

3. Complete the flexible budget performance report that shows both activity variances and revenue and spending variances for October.

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