lhe Westwood Management Association held its annual public relations luncheon in April 2013. Based on the previous year's results, the organization allocated $22,328of its operating budget to cover the cost of the luncheon. To ensure that costs would be appropriately controlled, Andrea Cole, the treasurer, prepared the following budget for the 2013 luncheon. The budget for the luncheon was based on the following expectations 1. The meal cost per person was expected to be $12.00. The cost driver for meals was 2. Postage was based on $0.48 per invitation and 3,100 invitations were expected to be 3. The facility charge is $1,200 for a room that will accommodate up to 1,600 people; the 4. A fixed amount was designated for printing, decorations, the speaker's gift, and attendance, which was expected to be 1,420 individuals mailed. The cost driver for postage was number of invitations mailed charge for one to hold more than 1,600 people is $1,700 publicity WESTWOOD MANAGEMENT ASSOCIATION Public Relations Luncheon Budget April 2013 $22,328 Operating funds allocated Expense:s Variable costs Meals (1,420 x $12.00 Postage (3,100x 0.48) Fixed costs Facility Printing Decorations Speaker's gift Publicity 17040 1,488 1,200 970 860 150 620 22,328 Total expenses WESTWOOD MANAGEMENT ASSOCIATION Actual Results for Public Relations Luncheon April 2013 $22,328 Operating funds allocated Expenses Variable costs Meals (1,640 127) Postage (4100 x 0.48) Fixed costs Facility Printing Decorations Speaker's gift Publicity 20,828 1,968 1,700 970 860 150 620 27,096 Total expenses $ (4,768) Budget deficit Reasons for the differences between the budgeted and actual data follow 1. The president of the organization, Zachary Taylor, increased the invitation list to include 1,000 former members. As a result, 4,100 invitations were mailed 2. Attendance was 1,640 individuals. Because of higher-than-expected attendance, the luncheon was moved to a larger room, thereby increasing the facility charge to$1,700 3. At the last minute, Ms. Cole decided to add a dessert to the menu, which increased the meal cost to $12.7 per person 4. Printing, decorations, the speaker's 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. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Negative amount should be indicated by a minus sign.) Master BudgetFlexible BudgetVolume Variance 22,328 Allocated funds Expenses Variable expenses 22,328 $ Meals 17,040 1,488 Postage Fixed expenses Facility Printing Decorations Speaker's gift Publicity 1,200 970 860 150 620 22,328 Total expenses Surplus(deficit) b. Compute flexible budget variances by comparing the flexible budget with the actual results. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Negative amount should be indicated by a minus sign.) Flexible Budget- Actual ResultsFlexible Variances Allocated funds Expenses Variable costs 22,328 Meals 20,828 1,968 Postage Fixed costs: Facility Printing Decorations Speaker's gift Publicity 1,700 970 860 150 620 27,096 $ (4,768) Total expenses Surplus(deficit)