Scenario: 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 costs would be appropriately controlled, you, the treasurer, prepared the following budget for the Year $2$ luncheon. The budget for the luncheon was based on the followoing expectations:

$1.$ The meal cost per person was expect to be $$14\mathrm{.}50.$ The cost driver for meals was attendance. which was expected to be $1,400$ individuals.

$2.$ Postage was based on $$0\mathrm{.}49$ per inventation and $3,000$ inventations were expected to be mailed. The cost driver for postage was number of inventations mailed.

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

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

Reasons for the differences between the budgeted and actual data follow.

$1.$ The president of the organization, Rodney snow, increased the invitation list to include $1,000$ former members. As a result, $4,000$ invitations were mailed.

$2.$ Attedance was $1,620$ individuals $.$ beause of higher$-$than$-$expectd attendance, the luncheon was moved to al larger room, thereby increaseing the facility charge to $$1,500.$

$3.$ At the last minute, Ms$.$ Hubbard decided to add a dessert to the menu, which incresed the meal cost to $$15\mathrm{.}50$ per person.

$4.$ Printing, decorations, the speaker's gift, and publicity costs were as budgeted.

Mr$.$ Snow was extremely upset with the budget deficit. He immediately called you, the treasurer, to complain about the budget variance for the meal cost. He told you that the added dessert caused the meal cost to be $$4,810($$$25,110-$$$20,300)$ over budget. He added, $$I could expect a couple hundred dollars one way or the other, but several thousand is totally unacceptable. At the next budget meeting of the budget committee, I want you to explain what happened.$$