Reference no: EM133041600
Question - Actual results for the luncheon follow.
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WALTON MANAGEMENT ASSOCIATION Actual Results for Public Relations Luncheon April Year 2
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Operating funds allocated
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$30,648
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Expenses
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Variable costs
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Meals (1,800 x $14.30)
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25,740
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Postage (4,900 x 0.80)
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3,920
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Fixed costs
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Facility
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3,300
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Printing
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1,130
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Decorations
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1,020
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Speaker's gift
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310
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Publicity
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780
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Total expenses
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36,200
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Budget deficit
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$(5,552)
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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.