The Munchkin Theater 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 costs from the current years planning budget appear below. The Munchkin Theater had tentatively planned to put on five different productions with a total of 75 performances. For example, one of the productions was Peter Rabbit, which had five performances.
The Munchkin Theater Costs from the Planning Budget For the Year Ended December 31
Budgeted number of productions		5
Budgeted number of performances		75
Actors and directors wages	$	157,500
Stagehands wages		22,500
Ticket booth personnel and ushers wages		17,625
Scenery, costumes, and props		36,000
Theater hall rent		52,500
Printed programs		15,000
Publicity		12,000
Administrative expenses		36,000
Total	$	349,125
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 pin down, but the best estimate is that approximately 70% of the budgeted costs are fixed, 20% 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 changing the theaters program to four productions and a total of 80 performances. Actual costs were 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 Munchkin Theater Actual Costs For the Year Ended December 31
Actual number of productions		4
Actual number of performances		80
Actors and directors wages	$	161,500
Stagehands wages		23,900
Ticket booth personnel and ushers wages		19,580
Scenery, costumes, and props		34,060
Theater hall rent		57,800
Printed programs		15,750
Publicity		11,300
Administrative expenses		34,200
Total	$	358,090
Required:
1.	Prepare a flexible budget for The Munchkin Theater based on the actual activity of the year.
The Munchkin Theater Flexible Budget For the Year Ended December 31
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	$
2.	Prepare a report that summarizes the spending variances for all expense items.(Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)
The Munchkin Theater Spending Variances For the Year Ended December 31
	Flexible Budget	Actual Results	Spending Variances
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	$	$	$