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 year's 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 $ 237,600 Stagehands wages 54,000 Ticket booth personnel and ushers wages 37,800 Scenery, costumes, and props 109,200 Theater hall rent 75,600 Printed programs 48,600 Publicity 13,200 Administrative expenses 64,800 Total $ 640,800

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 doesn't 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 theater's 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 $ 396,900 Stagehands wages 82,700 Ticket booth personnel and ushers wages 60,900 Scenery, costumes, and props 131,600 Theater hall rent 109,000 Printed programs 69,300 Publicity 17,100 Administrative expenses 77,500 Total $ 945,000

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.)