The Little Theatre is a nonprofit organization devoted to staging plays for children. The theater 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 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 costs from the current years planning budget appear below.

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	$	246,240
Stagehands wages		62,640
Ticket booth personnel and ushers wages		46,440
Scenery, costumes, and props		109,680
Theater hall rent		84,240
Printed programs		57,240
Publicity		13,680
Administrative expenses		45,360
Total	$	665,520

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 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. (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	$	419,400
Stagehands wages		95,900
Ticket booth personnel and ushers wages		74,900
Scenery, costumes, and props		132,000
Theater hall rent		121,400
Printed programs		81,700
Publicity		17,900
Administrative expenses		50,000
Total	$	993,200

The Little Theatre
Flexible Budget
For the Year Ended December 31
Actual number of productions	7
Actual number of performances	168
Actors' and directors' wages
Stagehands' wages
Ticket booth personnel and ushers' wages
Scenery, costumes, and props
Theater hall rent
Printed programs
Publicity
Administrative expenses
Total expense

The Little Theatre
Spending Variances
For the Year Ended December 31
	Actual Results	Spending Variances		Flexible Budget
Number of productions	7
Number of performances	168
Actors' and directors' wages	$419,400
Stagehands' wages	95,900
Ticket booth personnel and ushers' wages	74,900
Scenery, costumes, and props	132,000
Theater hall rent	121,400
Printed programs	81,700
Publicity	17,900
Administrative expenses	50,000
Total expense	$993,200

Required:

1. Prepare a flexible budget for The Little Theatre based on the actual activity of the year

2. Prepare a report for the year that shows the spending variances for all expense items.