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The Westwood Management Association held its annual public relations luncheon in April 2013. Based on the previous years results, the organization allocated $22,818of its operating budget to cover the cost of the luncheon. To ensure that costs would be appropriately controlled, Andrea Cole, the treasurer, prepared the following budget for the 2013 luncheon.

	The budget for the luncheon was based on the following expectations.
1.	The meal cost per person was expected to be $12.10. The cost driver for meals was attendance, which was expected to be 1,430 individuals.
2.	Postage was based on $0.50 per invitation and 3,150 invitations were expected to be mailed. The cost driver for postage was number of invitations mailed.
3.	The facility charge is $1,300 for a room that will accommodate up to 1,600 people; the charge for one to hold more than 1,600 people is $1,800.
4.	A fixed amount was designated for printing, decorations, the speakers gift, and publicity.

WESTWOOD MANAGEMENT ASSOCIATION Public Relations Luncheon Budget April 2013
Operating funds allocated	$	22,818
Expenses
Variable costs
Meals (1,430 $12.10		17,303
Postage (3,150 0.50)		1,575
Fixed costs
Facility		1,300
Printing		980
Decorations		870
Speakers gift		160
Publicity		630
Total expenses		22,818
Budget surplus (deficit)	$	0

Actual results for the luncheon follow.

WESTWOOD MANAGEMENT ASSOCIATION Actual Results for Public Relations Luncheon April 2013
Operating funds allocated	$	22,818
Expenses
Variable costs
Meals (1,650 12.8)		21,120
Postage (4,150 0.50)		2,075
Fixed costs
Facility		1,800
Printing		980
Decorations		870
Speakers gift		160
Publicity		630
Total expenses		27,635
Budget deficit	$	(4,817	)

	Reasons for the differences between the budgeted and actual data follow.
1.	The president of the organization, Zachary Taylor, increased the invitation list to include 1,000 former members. As a result, 4,150 invitations were mailed.
2.	Attendance was 1,650 individuals. Because of higher-than-expected attendance, the luncheon was moved to a larger room, thereby increasing the facility charge to$1,800
3.	At the last minute, Ms. Cole decided to add a dessert to the menu, which increased the meal cost to $12.8 per person.
4.	Printing, decorations, the speakers 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. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Negative amount should be indicated by a minus sign.)

b.	Compute flexible budget variances by comparing the flexible budget with the actual results. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Negative amount should be indicated by a minus sign.)

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