Reference no: EM133041600

Question - Actual results for the luncheon follow.

WALTON MANAGEMENT ASSOCIATION Actual Results for Public Relations Luncheon April Year 2
Operating funds allocated	$30,648
Expenses
Variable costs
Meals (1,800 x $14.30)	25,740
Postage (4,900 x 0.80)	3,920
Fixed costs
Facility	3,300
Printing	1,130
Decorations	1,020
Speaker's gift	310
Publicity	780
Total expenses	36,200
Budget deficit	$(5,552)

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, 4,900 invitations were mailed.

2. Attendance was 1,800 individuals. Because of higher-than-expected attendance, the luncheon was moved to a larger room, thereby increasing the facility charge to $3,300.

3. At the last minute, Ms. Hubbard decided to add a dessert to the menu, which increased the meal cost to $14.3 per person.

4. Printing, decorations, the speaker's gift, and publicity costs were as budgeted.

Required -

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.

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