The Little Theatre is a nonprofit organization devoted tostaging plays for children. The theatre has a very small full-timeprofessional administrative staff. Through a special arrangementwith the actors’ union, actors and directors rehearse without payand are paid only for actual performances.

The costs from the current year’s planning budget appear below.The Little Theatre had tentatively planned to put on five differentproductions with a total of 60 performances. For example, one ofthe productions was Peter Rabbit, which had a six-week runwith three performances on each weekend.

The Little Theatre Costs from the Planning Budget For the Year Ended December 31
Budgeted number of productions		5
Budgeted number of performances		60
Actors’ and directors’ wages	$	168,000
Stagehands’ wages		28,800
Ticket booth personnel and ushers’ wages		11,400
Scenery, costumes, and props		44,000
Theatre hall rent		46,800
Printed programs		12,300
Publicity		14,500
Administrative expenses		48,000
Total	$	373,800

Some of the costs vary with the number of productions, some withthe number of performances, and some are fixed and depend onneither the number of productions nor the number of performances.The costs of scenery, costumes, props, and publicity vary with thenumber of productions. It doesn’t make any difference how manytimes Peter Rabbit is performed, the cost of the sceneryis the same. Likewise, the cost of publicizing a play with postersand radio commercials is the same whether there are 10, 20, or 30performances of the play. On the other hand, the wages of theactors, directors, stagehands, ticket booth personnel, and ushersvary with the number of performances. The greater the number ofperformances, the higher the wage costs will be. Similarly, thecosts of renting the hall and printing the programs will vary withthe number of performances. Administrative expenses are moredifficult to pin down, but the best estimate is that approximately75% of the budgeted costs are fixed, 15% depend on the number ofproductions staged, and the remaining 10% depend on the number ofperformances.

After the beginning of the year, the board of directors of thetheatre authorized expanding the theatre’s program to fourproductions and a total of 64 performances. Not surprisingly,actual costs were considerably higher than the costs from theplanning budget. (Grants from donors and ticket sales were alsocorrespondingly higher, but are not shown here.) Data concerningthe actual costs appear below:

The Little Theatre Actual Costs For the Year Ended December 31
Actual number of productions		4
Actual number of performances		64
Actors’ and directors’ wages	$	174,000
Stagehands’ wages		30,400
Ticket booth personnel and ushers’ wages		12,900
Scenery, costumes, and props		40,300
Theatre hall rent		51,400
Printed programs		12,750
Publicity		13,500
Administrative expenses		46,450
Total	$	381,700

  

Required:

1. Complete the flexible budget for The Little Theatre based onthe actual activity of the year.

	The Little Theatre Flexible Budget For the Year Ended December 31 Actors’ and directors’ wages Stagehands’ wages Ticket booth personnel and ushers’wages Scenery, costumes, and props Theatre hall rent Printed programs Publicity Administrative expenses Total $

2. Complete the flexible budget performance report for the yearthat shows both activity variances and spending variances.(Indicate the effect of each variance by selecting "F" forfavorable, "U" for unfavorable, and "None" for no effect (i.e.,zero variance). Input all amounts as positive values.)

The Little Theatre Flexible Budget Performance Report For the Year Ended December 31 Actual Results Spending Variances Flexible Budget Activity Variances Planning Budget Actors' and directors' wages $174,000 $168,000 Stagehands' wages 30,400 28,800 Ticket booth personnel and ushers'wages 12,900 11,400 Scenery, costumes, and props 40,300 44,000 Theatre hall rent 51,400 46,800 Printed programs 12,750 12,300 Publicity 13,500 14,500 Administrative expenses 46,450 48,000 Total $381,700