The Little Theatre
Costs from the Planning Budget
For the Year Ended December 31 |
| Budgeted numberof productions | | 6 |
| Budgeted numberof performances | | 108 |
| | |
| Actors anddirectors wages | $ | 252,720 |
| Stagehandswages | | 69,120 |
| Ticket boothpersonnel and ushers wages | | 52,920 |
| Scenery,costumes, and props | | 110,040 |
| Theater hallrent | | 90,720 |
| Printedprograms | | 63,720 |
| Publicity | | 14,040 |
| Administrativeexpenses | | 79,920 |
| Total | $ | 733,200 |
|
Some of the costs varywith the number of productions, some with the number ofperformances, and some are fixed and depend on neither the numberof productions nor the number of performances.On the other hand,the wages of the actors, directors, stagehands, ticket boothpersonnel, and ushers vary with the number of performances. Thegreater the number of performances, the higher the wage costs willbe. Similarly, the costs of renting the hall and printing theprograms will vary with the number of performances. Administrativeexpenses are more difficult to analyze, but the best estimate isthat approximately 75% of the budgeted costs are fixed, 15% dependon the number of productions staged, and the remaining 10% dependon the number of performances. After the beginning of the year, theboard of directors of the theater authorized expanding thetheater’s program to seven productions and a total of 168performances. Not surprisingly, actual costs were considerablyhigher than the costs from the planning budget.
The Little Theatre
Actual Costs
For the Year Ended December 31 |
| Actual number ofproductions | | 7 |
| Actual number ofperformances | | 168 |
| | |
| Actors anddirectors wages | $ | 436,500 |
| Stagehandswages | | 105,800 |
| Ticket boothpersonnel and ushers wages | | 85,400 |
| Scenery,costumes, and props | | 132,300 |
| Theater hallrent | | 130,700 |
| Printedprograms | | 91,000 |
| Publicity | | 18,500 |
| Administrativeexpenses | | 98,500 |
| Total | $ | 1,098,700 |
|
Required:
1. Prepare a flexiblebudget performance report for the year that shows both spendingvariances and activity variances. (Indicate the effect ofeach variance by selecting "F" for favorable, "U" for unfavorable,and "None" for no effect (i.e., zero variance). Input all amountsas positive values.)
