case 9-29

CASES- Performance Report with More than One Cost Driver 10-1, L01-205-3, LOS-LOS The Line Theatre a nonprofit organisation devoted to storine time for children. The theater han a very small fulltime profesional administrative staff Through a special arrangement with the actor actors tied sectors there without pay and se pad only for actual performance The Lunde Theatre had tentavely planned to put on six different productions with a total of 108 performances. For example one of the production was Peter Rabbit which had a week with shree performances on each weekend. The costs from the current year's planning budget appear below Some of the com vay with the amber of productions, some with the number of performances, mul om we fixed and depend on neither the number of productions nor the number of performances. The costs of scenery, coste, 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 scenerys the same. Likewise, the cost of publicing a play with posters and radio commercials as the same whether there are 10, 20, or 30 performances of the play. On the other hand, the wages of the actor, directors, stathanda, ticket booth peenelandsher vary with the number of performance. The porter the number of performances, the higher the wape costs will be. Somilarly the corta of renting the hill and prsting the program will vary with the number of performances Adminstrative experts are more difficult to analyse, but the best mate as that approxmately 75% of the budgeted costs fored, 15% depend on the mimber of productions staged, and the remaining 10% depend on the umber of performances Page 404 The Little Theatre Costs from the Planning Budget For the Year Ended December 31 Budgeted number of productions Budgeted number of performances Actors and directors wages Stagehands wagos Ticket booth personnel and users wages Scenery, costumes, and props Theater rent Printed programs Publicity Administrative expenses Total 0 100 $216.000 32.400 10 200 100 000 54.000 27.000 12.000 43 200 5 508 800 Ather the beginning of the year, the bowd of directors of the theater authorised expanding the theater's program to production and a total of 16 performance. Not surprisingly, anul cost considerably higher than the cost from the planning badet (Grants from denon and tickets were also contendingly higher, but are not shown here) Data concoming the actual couts appear to The Little Theatre Administrative expenses Total 43,200 $508.800 Atter the beginning of the year, the boned of directors of the theater anthonzed expanding the theater's program to seven productos red a sotal of 168 performances Norurensingly, actual costs were considerably lagher than the costs from the planning budget (Grants from donors and ticket sales were also correspondingly higher, but he sot shown bete) Data concerning the actual costs appear below The Little Theatre Actual Costs For the Year Ended December 31 Actual number of productions Actual number of performances Actors and directors wages Stagehands wages Ticket booth personnel and users wages Scenery, costumes, and props Theater hall rent Printed programs Publicity Administrative expenses Total 7 168 $ 341 800 49,700 25,000 130,000 78,000 38,300 15.100 47 500 $726.900 Required: Use Exhibit 9-8 as your guide prepare a flexible budget performance report for the year that shows both spending varices and activity variances 2 If you were on the board of directors of the theater, would you be pleased with how well costs were controlled during the yea Why or why not? The cost formulin preride figures for the neare cout per production and average cout pet performance. How accurate do you think these figures would be for predicting the cou of a nem prodoction or of an additional performance of a particular production