Reference no: EM132735037

JORDAN MANAGEMENT ASSOCIATIONActual Results for Public Relations LuncheonApril Year 2

Operating funds allocated$25,842

Expenses Variable costs Meals (1,710 × $13.40) 22,914

Postage (4,450 × 0.62) 2,759

Fixed costs Facility 2,400

Printing 1,040

Decorations 930

Speaker's gift 220

Publicity 690

Total expenses 30,953

Budget deficit$(5,111)

Reasons for the differences between the budgeted and actual data follow.

1. The president of the organization, Rodney Snow, increased the invitation list to include 1,000 former members. As a result, 4,450 invitations were mailed.
2. Attendance was 1,710 individuals. Because of higher-than-expected attendance, the luncheon was moved to a larger room, thereby increasing the facility charge to$2,400
3. At the last minute, Ms. Hubbard decided to add a dessert to the menu, which increased the meal cost to $13.4 per person.
4. Printing, decorations, the speaker's gift, and publicity costs were as budgeted.

Required:

Problem a. Prepare a flexible budget and compute the sales and variable cost volume variances based on a comparison between the master budget and the flexible budget.

Problem b. Compute flexible budget variances by comparing the flexible budget with the actual results.