Reference no: EM133206236
Assignment - Chafes Little Theatre A Nonprofit Organization Flexible Budget Performance Report
Description - The Little Theatre is a nonprofit organization devoted to staging plays for children. The theater 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 Little Theatre had tentatively planned to put on six different productions with a total of 108 performances. For example, one of the productions was Peter Rabbit, which had a six-week run with three performances on each weekend. 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 6
Budgeted number of performances 108
Actors and directors wages $252,720
Stagehands wages 69,120
Ticket booth personnel and ushers wages 52,920
Scenery, costumes, and props 110,040
Theater hall rent 90,720
Printed programs 63,720
Publicity 14,040
Administrative expenses 79,920
Total $733,200
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. 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 were as follows:
The Little Theatre
Actual Costs
For the Year Ended December 31
Actual number of productions 7
Actual number of performances 168
Actors and directors wages $ 436,500
Stagehands wages 105,800
Ticket booth personnel and ushers wages 85,400
Scenery, costumes, and props 132,300
Theater hall rent 130,700
Printed programs 91,000
Publicity 18,500
Administrative expenses 98,500
Total $1,098,700
Required - 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.)