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The Little Theatre is a nonprofit organization devoted to staging plays for children. The theatre has a very small full-time professional administrative staff. Through a

The Little Theatre is a nonprofit organization devoted to staging plays for children. The theatre has a very small full-time professional administrative staff. Through a special arrangement with the actors union, actors and directors rehearse without pay and are paid only for actual performances.

The costs from the current years planning budget appear below. The Little Theatre had tentatively planned to put on six different productions with a total of 108 performances. For example, one of the productions was Peter Rabbit, which had a six-week run with three performances on each weekend.

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

$

216,000

Stagehands wages

32,400

Ticket booth personnel and ushers wages

16,200

Scenery, costumes, and props

108,000

Theatre hall rent

54,000

Printed programs

27,000

Publicity

12,000

Administrative expenses

43,200

Total

$

508,800

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. The costs of scenery, costumes, props, and publicity vary with the number of productions. It doesnt make any difference how many times Peter Rabbit is performed, the cost of the scenery is the same. Likewise, the cost of publicizing a play with posters and radio commercials is the same whether there are 10, 20, or 30 performances of the play. 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 pin down, 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 theatre authorized expanding the theatres program to seven productions and a total of 168 performances. Not surprisingly, actual costs were considerably higher than the costs from the planning budget. (Grants from donors and ticket sales were also correspondingly higher, but are not shown here.) Data concerning the actual costs appear below:

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

$

341,800

Stagehands wages

49,700

Ticket booth personnel and ushers wages

25,900

Scenery, costumes, and props

130,600

Theatre hall rent

78,000

Printed programs

38,300

Publicity

15,100

Administrative expenses

47,500

Total

$

726,900

Required:

1.

Complete the flexible budget for The Little Theatre based on the actual activity of the year.

2.

Complete the flexible budget performance report for the year that shows both activity variances and spending 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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