The Little Theatre is a nonprofit organization that stages plays for children. The theater has a very small full$-$time professional administrative staff. Through a special arrangement with the actors$$ union, actors and directors rehearse without pay and are paid only for actual performances.

The Little Theatre planned to put on six different productions with a total of $108$ performances. For example, one of the productions was Peter Rabbit, which had a six$-$week run with three performances on each weekend. The costs from the current year$$s planning budget appear below:

The Little Theatre

Costs from the Planning Budget

For the Year Ended December $31$

Budgeted number of productions $6$

Budgeted number of performances $108$

Actors and directors wages $ $237,600$

Stagehands wages $54,000$

Ticket booth personnel and ushers wages $37,800$

Scenery, costumes, and props $109,200$

Theater hall rent $75,600$

Printed programs $48,600$

Publicity $13,200$

Administrative expenses $64,800$

Total $ $640,800$

Some of the costs vary with the number of productions, some vary with the number of performances, and some are fixed. The costs of scenery, costumes, props, and publicity vary with the number of productions. It doesn$$t make any difference how many times Peter Rabbit is performed, the cost of the scenery is the same. Likewise, the cost of publicizing a play with posters and radio commercials is the same whether there are $10,20,$ or $30$ performances. On the other hand, the wages of the actors, directors, stagehands, ticket booth personnel, and ushers vary with the number of performances. Similarly, the costs of renting the hall and printing the programs vary with the number of performances. For administrative expenses, $75\%$ of the budgeted costs are fixed, $15\%$ depend on the number of productions staged, and the remaining $10\%$ depend on the number of performances.

After the beginning of the year, the theater's board of directors authorized expanding the theater$$s program to seven productions and a total of $168$ performances. Not surprisingly, actual costs were considerably higher than the planning budget. $($Grants from donors and ticket sales were also correspondingly higher but are not shown here.$)$ Data concerning the actual costs were as follows:

The Little Theatre

Actual Costs

For the Year Ended December $31$

Actual number of productions $7$

Actual number of performances $168$

Actors and directors wages $ $396,900$

Stagehands wages $82,700$

Ticket booth personnel and ushers wages $60,900$

Scenery, costumes, and props $131,600$

Theater hall rent $109,000$

Printed programs $69,300$

Publicity $17,100$

Administrative expenses $77,500$

Total $ $945,000$

 

 

Required:

$1.$ Prepare a flexible budget performance report for the year.

Note: Indicate the effect of each variance by selecting $"$F$"$ for favorable, $"$U$"$ for unfavorable, and "None" for no effect $($i$.$e$.,$ zero variance$).$ Input all amounts as positive values.

Answer rating: 100% (QA)

To prepare a flexible budget performance report we need to compare the actual costs with the flexible budget based on the actual number of productions ... View the full answer