BENSON MANAGEMENT ASSOCIATION Public Relations Luncheon Budget April Year 2 Operating funds allocated $ 22,818 Expenses Variable costs Meals (1,430 $12.10) 17,303 Postage (3,150 0.50) 1,575 Fixed costs Facility 1,300 Printing 980 Decorations 870 Speaker's gift 160 Publicity 630 Total expenses 22,818 Budget surplus (deficit) $ 0 Actual results for the luncheon follow. BENSON MANAGEMENT ASSOCIATION Actual Results for Public Relations Luncheon April Year 2 Operating funds allocated $ 22,818 Expenses Variable costs Meals (1,650 $12.80) 21,120 Postage (4,150 0.50) 2,075 Fixed costs Facility 1,800 Printing 980 Decorations 870 Speaker's gift 160 Publicity 630 Total expenses 27,635 Budget deficit $ (4,817 ) Reasons for the differences between the budgeted and actual data follow. The president of the organization, Rodney Snow, increased the invitation list to include 1,000 former members. As a result, 4,150 invitations were mailed. Attendance was 1,650 individuals. Because of higher-than-expected attendance, the luncheon was moved to a larger room, thereby increasing the facility charge to$1,800 At the last minute, Ms. Hubbard decided to add a dessert to the menu, which increased the meal cost to $12.8 per person. Printing, decorations, the speakers gift, and publicity costs were as budgeted. Required: a. Prepare a flexible budget and compute the sales and variable cost volume variances based on a comparison between the master budget and the flexible budget. b. Compute flexible budget variances by comparing the flexible budget with the actual results.