But in reality, it turns out that due to poor publicity and bad weather on the day of the event, only 750 people attend the event. Actual results follow below, in the middle numeric column of the table on p. 8.

a. What kind of budget is prepared at an activity level different from the original level? (i.e., what do we call this kind of budget?)

b. Please prepare a budget assuming 750 attendees, and place it in the first numeric column below.

c. Compute the variance for each budget item, showing these in the last numeric column below. Please be sure your variance is followed by its appropriate letter.

d. List three variances that you think should be investigated.

Eventissimo, an event planning firm (great name, hunh? Made it up myself!), has created a budget for a large charitable dinner event they are planning, as follows: Revenue (1000 guests @ $95 per ticket).. $ 95,000 Expenses: Variable: Food (1000 guests @ $55). $ 55,000 Party gifts (1000 guests @ $7)........ 7,000 Floral Centrepieces (100 tables @ $18)........1,800 Chair covers (1000 guests @ $6).............. 6,000 Contribution Margin......... 25,200 Fixed: Event planning fee. 3,000 Room Rental..... 2,500 Security........ 1,200 Sound System Rental. 3,600 Room dcor..... 2,100 Door prizes....... 800 13,200 Net Profit for charity. $ 12,000 Budget @ 750 Actual $ 71,250 43,500 5,000 1,480 4,920 16,350 Variance Revenue Food Party Gifts Centrepieces Chair Covers Contribution Margin Event Planning Fee Room rental Security Sound System rental Room dcor Door prizes Net Profit 3,500 3,200 1,600 3,500 1,800 800 $ 1,950