Practice: Planning, Coordinator, and Controlling Business
The Baird Management Association held its annual public relations luncheon in April Year 2 Based on the previous year's results. the organization allocated $22,328 of its operating budget to cover the cost of the luncheon. To ensure that costs would be appropriately controlled, Molly Hubbard, the treasurer, prepared the following budget for the Year 2 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 attendance, which was expected to be 1.420 individuals. 2. Postage was based on $0.48 per invitation and 3,100 invitations were expected to be matled. The cost driver for postage was number of invitations malled. 3. The facility charge is $1,200 for a room that will accommodate up to 1,600 people; the charge for one to hold more than 1,600 people 15$1,700 4. A fixed amount was designated for printing, decoratons, the speaker's gitt, and publicity. Actual results for the luncheon follow. Reasons for the differences between the budgeted and actual data follow: 1. The president of the organization, Rodney Snow, increased the invitation inst to include 1.000 formet members. As a resulz, 4100 invitations were malled. 2. Attendance was 1,640 individuals. Because of higher-than-expected attendance, the funcheon was moved to a larger room, thereby increasing the facility charge tos:700 3. At the last minute. Ms Hubbard decided to add a dessert to the menu, which increased the meal cost to \$127 perperson. 4. Pinting. decorations, the speaker's gin and publicty costs were as budgeted. Required: -. Prepare a flexible budget and compute the sales and vanable cost volume variances based on a companson between the masten budget and the flexible buciget. b. Compute flexble budget vanances by comparing the flexible budget with the actual results Prepare a flexible budget and compute the sales and varlable cost volume varlances based on a comparison betwee sudget and the flexible budget. . Compute flexible budget varlances by comparing the flexible budget with the actual results. Complete this question by entering your answers in the tabs below. 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 (.,ey zero variance).) Required: a. Prepare a flexible budget and compute the sales and variable cost volume varlances based on a comparison betwe budget and the flexible budget. b. Compute flexible budget varlances by comparing the flexible budget with the actual results. Complete this question by entering your answers in the tabs below. 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).)
