Excelshowing all work and formulasto complete the following: How can I create flexible budget. Compute the sales volume variance and the variable cost volume variances based on a comparison between the master budget and the flexible budget. Compute flexible budget variances by comparing the flexible budget with the actual results.

TheRedmond Management Association held its annual public relations luncheon in April Year 2. Based on the previous year's results, the organization allocated $25,290 of its operating budget to cover the cost of the luncheon. To ensure that costs would be appropriately controlled, Molly Hubbard, the treasuer, prepared the following budget for the Year 2 luncheon.

The budget for the luncheon was based on the following expectations:

1.The mean cost per person was expected to be $14.50. The driver for meals was attendance, which was expected to be 1,400 individuals.

2.Postage was based on $0.49 per invitation and 3,000 invitations were expected to be mailed. The cost driver for postage was number of invitations mailed.

3.The facility charge is $1,000 for a room that will accommodate up to 1,600 people; the charge for one hold more than 1,600 people is $1,500.

4.A fixed amount was designated for printing, decorations, the speaker's gift, and publicity,

Redmond Management Association

Public Relations Luncheon Budget

April Year 2

Operating funds allocated$25,290

Expenses

Variable Costs

Meals (1,400x$14.50)20,300

Postage(3,000x$0.49)1,470

Fixed Costs

Facility1,000

Printing950

Decorations840

Speaker's Gift130

Publicity600

Total Expenses25,290

Budget surplus(deficit)0

Actual Results:

Operating Funds Allocated$25,290

Expenses

Variable Cost

Meals(1,620x$15.50)$25,110

Postage(4,000x$0.49)1,960

Fixed Cost

Facility1,500

Printing960

Decorations840

Speakers Gift130

Publicity600

Total Expenses$31,090

Budget Deficit$5,800