Theodore's 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. Theodore's Little Theatre had tentatively planned to put on 6 different productions with a total of 50 performances. For example, one of the productions was Peter Rabbit, which had a six-week run with three performances on each weekend.

Theodore's Little Theatre Costs from the Planning Budget For the Year Ended December 31

Budgeted number of productions

6

Budgeted number of performances

50

Actors and directors wages

$

115,000

Stagehands wages

21,500

Ticket booth personnel and ushers wages

11,000

Scenery, costumes, and props

49,800

Theatre hall rent

36,500

Printed programs

9,000

Publicity

18,000

Administrative expenses

44,000

Total

$

304,800

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 five productions and a total of 54 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:

Theodore's Little Theatre Actual Costs For the Year Ended December 31
Actual number of productions		5
Actual number of performances		54
Actors and directors wages	$	119,000
Stagehands wages		23,100
Ticket booth personnel and ushers wages		12,500
Scenery, costumes, and props		46,100
Theatre hall rent		41,100
Printed programs		9,450
Publicity		17,000
Administrative expenses		42,450
Total	$	310,700

Required:

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

Requiled. 1. Prepare a flexible budget for Theodore's Little Theatre based on the actual activity of the year Answer is complete but not entirely correct The Little Theatre Flexible Budget For the Year Ended December 31 $124,200 23,220 11,880 39,840 39,420 9,720 14,400 84,880 $ 347,560 Actors' and directors' wages Stagehands wages ket booth personnel and ushers wageS Scenery, costumes, and props Theatre hall rent Printed programs Publicity Administrative expenses Total Prepare a report for the year that shows the spending variances for all expense items. (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.) Answer is complete but not entirely correct. The Little Theatre Flexible Budget Performance Report For the Year Ended December 31 Actual Results Flexible Budget Spending Variances $ 124,200 23,220 11,880 39,840 39,420 9,720 14,400 84,880 S 347,560 Actors' and directors' wages Stagehands' wages 119,000 5,200F 120F 620 | U 23,100 12,500 46,100 41,100 9,450 17,000 42,450 ket booth personnel and ushers age Scenery, costumes, and props Theatre hall rent Printed programs Publicity Administrative expenses Total 1,680 U 270 F 2,600 X U 84,880 x F $310,700 79,310x U