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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.) The Little Theatre

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.) The Little Theatre

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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How do I calculate the flexible budget sheet?

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 Budgeted number of performances 108 $224,640 41,040 Ticket booth personnel and ushers wages 24,840 108,480 62,640 35,640 12,480 51,840 Actors and directors wages Stagehands wages Scenery, costumes, and props Theater hall rent Printed programs Publicity Administrative expenses Total $561,600 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. Data concerning the actual costs were as follows: The Little Theatre Actual Costs For the Year Ended December 31 Actual number of productions Actual number of performances 7 168 Actors and directors wages Stagehands wages Ticket booth personnel and ushers wages Scenery, costumes, and props Theater hall rent $363,600 62,900 39,900 131,000 90,400 50,700 15,900 59,500 Printed programs Publicity Administrative expenses Total $813,900
Transcribed Image Text: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 Budgeted number of performances 108 $224,640 41,040 Ticket booth personnel and ushers wages 24,840 108,480 62,640 35,640 12,480 51,840 Actors and directors wages Stagehands wages Scenery, costumes, and props Theater hall rent Printed programs Publicity Administrative expenses Total $561,600 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. Data concerning the actual costs were as follows: The Little Theatre Actual Costs For the Year Ended December 31 Actual number of productions Actual number of performances 7 168 Actors and directors wages Stagehands wages Ticket booth personnel and ushers wages Scenery, costumes, and props Theater hall rent $363,600 62,900 39,900 131,000 90,400 50,700 15,900 59,500 Printed programs Publicity Administrative expenses Total $813,900
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.) The Little Theatre Flexible Budget Performance Report For the Year Ended December 31 Actual Results Revenue and Spending Variances Planning Budget Flexible Activity Variances Budget Number of productions 7 7 6 Number of performances 168 168 108 Actors' and directors' wages $ 363,600 $ 224,640 Stagehands' wages 62,900 F 41,040 Ticket booth personnel and ushers' wages 39,900 24,840 Scenery, costumes, and props 131,000 108,480 Theatre hall rent 90,400 62,640 Printed programs 50,700 35,640 Publicity 15,900 12,480 Administrative expenses 59,500 51,840 Total $ 813,900 $ 561,600
Transcribed Image Text: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.) The Little Theatre Flexible Budget Performance Report For the Year Ended December 31 Actual Results Revenue and Spending Variances Planning Budget Flexible Activity Variances Budget Number of productions 7 7 6 Number of performances 168 168 108 Actors' and directors' wages $ 363,600 $ 224,640 Stagehands' wages 62,900 F 41,040 Ticket booth personnel and ushers' wages 39,900 24,840 Scenery, costumes, and props 131,000 108,480 Theatre hall rent 90,400 62,640 Printed programs 50,700 35,640 Publicity 15,900 12,480 Administrative expenses 59,500 51,840 Total $ 813,900 $ 561,600
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