Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Redmond Management Association held its annual public relations luncheon in April Year 2. Based on the previous years results, the organization allocated $25,290 of

The Redmond Management Association held its annual public relations luncheon in April Year 2. Based on the previous years results, the organization allocated $25,290 of its operating budget to cover the cost of the luncheon. To ensure that costs would be appropriately controlled, you, the treasurer, prepared the following budget for the Year 2 luncheon.

showing all work and formulasto complete the following:

  • Prepare a flexible budget.
  • Compute the sales volume variance and the variable cost volume variances based on a comparison between the master budget and the flexible budget.
  • Compute flexible budget variances by comparing the flexible budget with the actual results.

Mr. Snow was extremely upset with the budget deficit. He immediately called you, the treasurer, to complain about the budget variance for the meal cost. He told you that the added dessert caused the meal cost to be $4,810 ($25,110-$20,300) over budget. He added, I could expect a couple hundred dollars one way or the other, but several thousand is totally unacceptable. At the next budget meeting of the budget committee, I want you to explain what happened.

Create a report for the budget committee meeting. Complete the following in your presentation:

  • Summarize the results of the sales volume and variable cost volume variances computations based on the comparison between the master budget and the flexible budget.
  • Summarize the results of the flexible budget variances computations based on the comparison between the flexible budget and the actual results.
  • Justify the favorable or unfavorable budget variances.
  • Since this is a not-for-profit organization, address why anyone should be concerned with meeting the budget.
  • Make recommendations for what can be done differently to stay on budget for future luncheons. Provide specific examples to support your recommendations.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

Is short-selling good for the stock markets?

Answered: 1 week ago

Question

6. Identify characteristics of whiteness.

Answered: 1 week ago

Question

e. What are notable achievements of the group?

Answered: 1 week ago