The Fanning Management Association held its annual public relations luncheon in April Year 2. Based on the previous year's results, the organization allocated $23,810 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 $12.30. The cost driver for meals was attendance, which was expected to be 1,450 individuals. 2. Postage was based on $0.54 per invitation and 3,250 invitations were expected to be mailed. The cost driver for postage was number of invitations mailed. 3. The facility charge is $1,500 for a room that will accommodate up to 1,600 people; the charge for one to hold more than 1,600 people is $2,000. 4. Axed amount was designated for printing, decorations, the speaker's gift, and publicity. FANNING MANAGEMENT ASSOCIATION Public Relations Luncheon Budget April Year 2 Operating funds allocated $23,810 Expenses Variable costs Meals (1.450 x $12.30) 17,835 Postage (3,250 x 0.54) 1.755 Fixed costs Facility 1,500 Printing 1,000 Decorations 890 Speaker's gift 180 Publicity 650 Total expenses 23,810 Budget surplus (decit) $ 0 Actual results for the luncheon follow. FANNING MANAGEMENT ASSOCIATION Actual Results for Public Relations Luncheon April Year 2 Operating funds allocated $23,810 Expenses Variable costs Meals (1,670 x $13.00) 21,710 Postage (4,250 x 0.54) 2,295 Fixed costs Facility 2,000 Printing 1,000 Decorations 890 Speaker's gift 180 Publicity 650 Total expenses 28,725 Budget decit $ (4,915) 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, 4,250 invitations were mailed. 2. Attendance was 1,670 individuals. Because of higher-than-expected attendance, the luncheon was moved to a larger room, thereby increasing the facility charge to$2,000 3. At the last minute, Ms. Hubbard decided to add a dessert to the menu, which increased the meal cost to $13.0 per person. 4. Printing, decorations, the speaker's gift, and publicity costs were as budgeted. Required: 3. Prepare a exible budget and compute the sales and variable cost volume variances based on a comparison between the master budget and the exible budget. b. Compute exible 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 variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Allocated funds Expenses: Variable expenses Facility Printing Decorations Publicity Total expenses 23.810 Surplus(decit) $ 0 Required B > 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 (i.e., zero variance).) Flexible Budget Actual Results = Flexible Variances Allocated funds $ 23,810 Expenses: Variable costs: Meals 21,710 Postage 2,295 Fixed costs: Facility 2,000 Printing 1,000 Decorations 890 Speaker's gift 180 Publicity 650 Total expenses 28,725 Surplus(deficit) $ (4,915)