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The Adams Management Association held its annual poblic relations luncheon in April Year 2. Based on the previous year's results, the organization allocated 521842 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 $11.90: The cost driver for meals was attendance, which was expected to be 1410 individuals 2. Postage was based on 30 46 per invitation and 3.050 invitations were expected to be mailed The cost driver for postage was number of invitations mailed. 3. The facility charge is $1100 for a room that will accommodate up to 1600 people, the charge for one to hold more than 1600 people is $1,000 4. A fixed amount was designated for printing, decorations, the speaker's gift and publicity 121.43 16.77 1.43 AMS MERENT ASSOCIATION Pubi Nelations Luncheon All Year Operating funds and Expenses Variable costs Heals (1.40 $11.90) Postage (3,050 0.46) Fixed costs Facility Printing Decorations Speaker's gift Publicity Total pe Bustert surplus deficit) 1,100 50 140 10 11,2 o Actual results for the luncheon follow Actual results for the luncheon follow ADAMS MANAGEMENT ASSOCIATION Actual Results for Public Relations Cuncheon April Year Operating funds allocated 521,043 Expenses Variable costs Meals (1.610 312.60) 20,55 Postoge (4,056 0.45) 2,863 Fixed Facility 1,600 Printing 960 Decoration Speakers ft 140 Publicity 610 Total expenses 26561 Budget deficit (4,719) 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 4.050 invitations were maled. 2 Attendance was 1630 individuals. Because of higher than expected attendance, the luncheon was moved to a larger room, thereby increasing the facility charge to $1600 3. At the last minute. Ms. Hubbard decided to add a dessert to the menu, which increased the meal cost to S126 per person 4. Printing, decorations, the speaker's giftand 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 b. Compute flexible budget variances by comparing the flexible budget with the actual results. Complete this question by entering your answers in the tabs below. Required A Required B 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 varlance by selecting "F" for favorable, "ufor unfavorable, and "None" for no effect (ezero variance).) Master Budget Flexible Budget Volume Variance Alocated funds 3 21,342 Expenses Variable expenses Meals 16,779 Postage 1.403 Fored expenses Facility 1.100 Printing 560 Decorations 850 Speaker's gift 140 Publicity 610 Total expenses 21,842 Surplus(deficit) 5 0 Required B) Required: .. 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. b. Compute flexible budget variances by comparing the flexible budget with the actual results. Complete this question by entering your answers in the tabs below. Required A Required 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 (... zero variance).) Flexible Budget Flexible Variances Actual Results 21,842 20,538 1.863 Allocated funds Expenses Variable costs Meals Postage Fixed costs Facility Printing Decorations Speaker's gift Publicity Total expenses Surplus(deficit) 1.600 960 850 140 610 26 561 (4.719) (Required A