Sayed Case 9-29 Performance Report with More Than One Cost Driver (LO9-1, LO9-2, LO9-3, LO9-4, LO9-5) The Little Theatre is a nonprofit organization devoted to staging plays for children. The theater has a very small full-time professional administrative staff. Through a special arrangement with the actors' union, actors and directors rehearse without pay and are paid only for actual performances The Little Theatre had tentatively planned to put on six different productions with a total of 108 performances. For example, one of the productions was Peter Rabbit which had a six week run with three performances on each weekend. The costs from the current year's planning budget appear below. The Little Theatre Costs from the planning Budget For the Year Ended December 31 Budgeted number of productions Budgeted number of performances 6 108 Actors and directors wages Stagehands wages Ticket booth personnel and ushers mages Scenery, costumes, and props Theater hall rent Printed programs Publicity Administrative expenses Total $216,000 32.400 16,20 108. eae 54,000 27.ee 12.000 43,200 $ 588,888 Some of the costs vary with the number of productions, some with the number of performances, and some are fixed and depend on neither the number of productions nor the number of performances. The costs of scenery, costumes. 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 scenery is the same Likewise, the cost of publicizing a play with posters and radio commercials is the same whether there are 10, 20, or 30 performances of the play. On the other hand, the wages of the actors, directors, stagehands, ticket booth personnel and ushers vary with the number of performances. The greater the number of performances the higher the wage costs will be. Similarly, the costs of renting the hall and printing the programs will vary with the number of performances. Administrative expenses are more difficult to analyze, but the best estimate is that approximately 75% of the budgeted costs are fixed, 15% depend on the number of productions staged, and the remaining 10% depend on the number of performances After the beginning of the year, the board of directors of the theater authorized expanding the theater's program to seven productions and a total of 168 performances. Not surprisingly actual costs were considerably higher than the costs from the planning budget (Grants from donors and ticket sales were also correspondingly higher but are not shown here) Data concerning the actual costs Saved After the beginning of the year, the board of directors of the theater authorized expanding the theater's program to seven productions and a total of 168 performances. Not surprisingly, actual costs were considerably higher than the costs from the planning budget (Grants from donors and ticket sales were also correspondingly higher, but are not shown here) Data concerning the actual costs appear below: 7 168 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 ushers wages Scenery, costumes, and props Theater hall rent Printed programs Publicity Administrative expenses Total 5 341,800 49,700 25,90 130, 600 78, eee 38,300 15,1ee 47,5ee $ 726,900 Required: 1. Prepare a flexible budget performance report for the year that shows both spending variances and activity variances (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) The Little Theatre Flexible Budget Performance Report For the Year Ended December 31 Actual Revenue and Spending Flexible Results Variances Budget 7 168 Activity Varances Planning Budget 6 Number of productions Number of performances 106 $ 341,800 $ Actors and directors wages Stagehands wages Ticket booth personnel and ushers' wages Scenery, costumes and props 49,700 25.900 130,600 216,000 32.400 16,200 100,000 Publicity Administrative expenses Total 38, 30 15,100 47,500 $ 726,9ee Required: 1. Prepare a flexible budget performance report for the year that shows both spending variances and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) The Little Theatre Flexible Budget Performance Report For the Year Ended December 31 Actual Revenue and Spending Flexible Results Variances Budget 7 168 Activity Variances Number of productions Number of performances Planning Budget 6 108 $ $ Actors and directors' wages Stagehands' wages Ticket booth personnel and ushers' wages Scenery, costumes, and props Theatre hall rent Printed programs Publicity Administrative expenses Total 341,800 49.700 25 900 130 600 78,000 216,000 32.400 16,200 108.000 54,000 38,300 15 100 27,000 12.000 43,200 47.500 $ 726,900 $ 21. 120 $ 508,800