Question
The Little Theatre Costs from the Planning Budget For the Year Ended December 31 Budgeted number of productions 6 Budgeted number of performances 108 Actors
The Little Theatre Costs from the Planning Budget For the Year Ended December 31 | ||
Budgeted number of productions | 6 | |
Budgeted number of performances | 108 | |
Actors and directors wages | $ | 252,720 |
Stagehands wages | 69,120 | |
Ticket booth personnel and ushers wages | 52,920 | |
Scenery, costumes, and props | 110,040 | |
Theater hall rent | 90,720 | |
Printed programs | 63,720 | |
Publicity | 14,040 | |
Administrative expenses | 79,920 | |
Total | $ | 733,200 |
Some of the costs vary with the number of productions, some with the number of performances, and some are fixed and depend on neither the number of productions nor the number of performances.On the other hand, the wages of the actors, directors, stagehands, ticket booth personnel, and ushers vary with the number of performances. The greater the number of performances, the higher the wage costs will be. Similarly, the costs of renting the hall and printing the programs will vary with the number of performances. Administrative expenses are more difficult to analyze, but the best estimate is that approximately 75% of the budgeted costs are fixed, 15% depend on the number of productions staged, and the remaining 10% depend on the number of performances. After the beginning of the year, the board of directors of the theater authorized expanding the theaters program to seven productions and a total of 168 performances. Not surprisingly, actual costs were considerably higher than the costs from the planning budget.
The Little Theatre Actual Costs For the Year Ended December 31 | ||
Actual number of productions | 7 | |
Actual number of performances | 168 | |
Actors and directors wages | $ | 436,500 |
Stagehands wages | 105,800 | |
Ticket booth personnel and ushers wages | 85,400 | |
Scenery, costumes, and props | 132,300 | |
Theater hall rent | 130,700 | |
Printed programs | 91,000 | |
Publicity | 18,500 | |
Administrative expenses | 98,500 | |
Total | $ | 1,098,700 |
Required:
1. Prepare a flexible budget performance report for the year that shows both spending variances and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
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