Question
Read the scenario- Answer questions at end. ** Please add information under each question** This scenario puts you in charge of preparing a budget for
Read the scenario- Answer questions at end.
** Please add information under each question**
This scenario puts you in charge of preparing a budget for the Redmond Management Association annual public relations luncheon.
The Redmond 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 cost are 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 expected to be $14.50. The cost driver for meals was attendance, which was expected to be 1,400 individuals.
2.Postage was based on $0.49 per individual 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 hold up to 1,600 people. The charge for one to hold more than 1,600 people is $1,500.
4.A fixed amount was designated for printing, decorations, the speaker's gift and publicity.
Luncheon Budget, April Year 2
Operating funds allocated$25,290
Expenses
Variable cost
Meals (1,400 *$14.50)$20,300
Postage (3000*$0.49)$1,470
Fixed cost
Facility$1000
Printing$950
Decorations$840
Speaker's gift$130
Publicity$600
Total expenses$25,290
Budget surplus (deficit) $0
Actual results for the luncheon follow.
Operating funds allocated$25,290
Expenses
Variable cost
Meals (1,620 * $15.50)$25,110
Postage (4,000 * $0.49) $1,960
Fixed cost
Facility$1500
Printing$950
Decorations$840
Speaker's gift$130
Publicity$600
Total expenses$31,090
Budget surplus (deficit) $ (5,800)
Use Excelshowing all work and formulasto complete the following:
** Please add information under each question**
1.Show the flexible budget.
2.Compute the sales volume variance and the variable cost volume variances based on a comparison between the master budget and the flexible budget.
3.Compute flexible budget variances by comparing the flexible budget with the actual results.
4.Summarize the results of the sales volume and variable cost volume variances computations based on the comparison between the master budget and the flexible budget.
5.Summarize the results of the flexible budget variances computations based on the comparison between the flexible budget and the actual results.
6.Justify the favorable or unfavorable budget variances.
7.Since this is a not-for-profit organization, address why anyone should be concerned with meeting the budget.
8.Make recommendations for what can be done differently to stay on budget for future luncheons. Provide specific examples to support your recommendations.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started