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: 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. 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. . 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. . A fixed 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 = $12.30) 17.835 Postage (3. 250 = 0.54) 1.755 Fixed costs Facility 1.500 Printing 1,000 Decorations 890 Speaker's gift 180 Publicity 650 Total expenses 73.810 Budget surplus (deficit) 0FANNING MANAGEMENT ASSOCIATION Public Relations Luncheon Budget April Year 2 Operating funds allocated $23,810 Expenses Variable costs Meals (1, 450 = $12.30) 17.835 Postage [3. 250 . 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 (deficit) 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 * $13.00) 21.710 Postage (4, 250 . 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 deficit $(4.915) Reasons for the differences between the budgeted and actual data follow. 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. . 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 At the last minute, Ms. Hubbard decided to add a dessert to the menu, which increased the meal cost to $13.0 per person. Printing, decorations, the speaker's gift, and 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.increasing the facility charge to$2,000 At the last minute, Ms. Hubbard decided to add a dessert to the menu, which increased the meal cost to $13.0 per person. Printing, decorations, the speaker's gift, and 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 i the tabs below. Required A Required B Prepare a flexible budget and compute the sales an variable cost volume variances based on a compari between the master budget and the flexible budget. (Indicate the effect of each variance by selecting "F favorable, "U" for unfavorable, and "None" for no effe (i.e., zero variance).) Master Budget - Flexible Budget Volume Variance Allocated funck 73,810 Variable expenses Meals 17.835 Postage 1,755 Fixed expenses Facility 1,500 Printing 1.000 Decorations 890 Speaker's gift 180 Publicity 650 Total expenses 23,810 Surplus(deficit) S 0 Required B >increasing the facility charge to$2,000 At the last minute, Ms. Hubbard decided to add a dessert to the menu, which increased the meal cost to $13.0 per person. Printing, decorations, the speaker's gift, and 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 i the tabs below. Required A Required B Prepare a flexible budget and compute the sales an variable cost volume variances based on a compari between the master budget and the flexible budget. (Indicate the effect of each variance by selecting "F favorable, "U" for unfavorable, and "None" for no effe (i.e., zero variance).) Master Budget - Flexible Budget Volume Variance Allocated funck 73,810 Variable expenses Meals 17.835 Postage 1,755 Fixed expenses Facility 1,500 Printing 1.000 Decorations 890 Speaker's gift 180 Publicity 650 Total expenses 23,810 Surplus(deficit) S 0 Required B >