The Benson Management Association held its annual public relations luncheon in April Year 2. Based on the previous year's results, the organization allocated $22,818 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 $12.10. The cost driver for meals was attendance, which was expected to be 1,430 individuals. 2. Postage was based on $0.50 per invitation and 3,150 invitations were expected to be mailed. The cost driver for postage was number of invitations mailed. 3. The facility charge is $1,300 for a room that will accommodate up to 1,600 people; the charge for one to hold more than 1,600 people is $1,800 4. A fixed amount was designated for printing, decorations, the speaker's gift, and publicity. BENSON MANAGEMENT ASSOCIATION Public Relations Luncheon Budget April Year 2 Operating funds allocated $ 22, 818 Expenses Variable costs Meals (1, 430 x $12.10) 17, 303 Postage (3,150 x 0.50) 1, 575 Fixed costs Facility 1, 300 Printing 980 070BENSON MANAGEMENT ASSOCIATION Public Relations Luncheon Budget April Year 2 Operating funds allocated $ 22, 818 Expenses Variable costs Meals (1, 430 x $12.10) 17, 303 Postage (3, 150 x 0.50) 1, 575 Fixed costs Facility 1, 300 Printing 980 Decorations 870 Speaker's gift 160 Publicity 630 Total expenses 22, 818 Budget surplus (deficit) $ 0 Actual results for the luncheon follow. BENSON MANAGEMENT ASSOCIATION Actual Results for Public Relations Luncheon April Year 2 Operating funds allocated $ 22, 818 Expenses Variable costs Meals (1, 650 x $12. 80) 21, 120 Postage (4, 150 x 0. 50) 2, 075 CiandActual results for the luncheon follow. BENSON MANAGEMENT ASSOCIATION Actual Results for Public Relations Luncheon April Year 2 Operating funds allocated $ 22, 818 Expenses Variable costs Meals (1, 650 x $12. 80) 21, 120 Postage (4,150 x 0.50) 2, 075 Fixed costs Facility 1, 800 Printing 980 Decorations 870 Speaker's gift 160 Publicity 630 Total expenses 27, 635 Budget deficit $ (4, 817) 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, 4,150 invitations were mailed. 2. Attendance was 1,650 individuals. Because of higher-than-expected attendance, the luncheon was moved to a larger room, thereby increasing the facility charge to $1,800. 3. At the last minute. Ms. Hubbard decided to add a dessert to the menu. which increased the meal cost to $12.80 per person.2. Attendance was 1,650 individuals. Because of higher-than-expected attendance, the luncheon was moved to a larger room, thereby increasing the facility charge to $1,800. 3. At the last minute, Ms. Hubbard decided to add a dessert to the menu, which increased the meal cost to $12.80 per person. 4. Printing, decorations, the speaker's gift, and publicity costs were as budgeted. Required: a. Prepare a flexible budget and compute the sales and 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. Note: Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance). Master Budget Flexible Budget = Volume Variance Allocated funds $ 22,818Required 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. Note: Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance). Master Budget Flexible Budget Volume Variance Allocated funds $ 22,818 Expenses: Variable expenses: Meals 17,303 Postage 1,575 Fixed expenses: Facility 1,300 Printing 980 Decorations 870 Speaker's gift 160 Publicity 630 Total expenses 22,818 Surplus(deficit) $ 0Required A Required B Compute flexible budget variances by comparing the flexible budget with the actual results. Note: Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance). Flexible Budget Actual Results Flexible Variances Allocated funds $ 22,818 = Expenses: Variable costs: Meals 21,120 S Postage 2,075 = Fixed costs: Facility 1,800 Printing 980 Decorations 870 Speaker's gift 160 Publicity 630 Total expenses 27,635 Surplus(deficit) $ (4,817)