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The City Symphony Orchestra presents a series of concerts throughout the year. Budgeted fixed costs total $301,000 for the concert season; variable costs are expected
The City Symphony Orchestra presents a series of concerts throughout the year. Budgeted fixed costs total $301,000 for the concert season; variable costs are expected to average $6.00 per patron. The orchestra uses flexible budgeting.
Required:
- Prepare a flexible budget that shows the expected costs of 8,200, 8,700, and 9,200 patrons.
- Construct the orchestra's flexible budget formula.
- Assume that 8,300 patrons attended concerts during the year just ended, and actual costs were: variable, $40,000; fixed, $311,500. Evaluate the orchestra's financial performance by computing variances for variable costs and fixed costs.
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