The budget for the presentation was based on the following expectations: Attenda

Question

The budget for the presentation was based on the following expectations: Attendance was estimated at 50 faculty from Fuller state and neigh boring school. 125 invited guests from the business community, and 200 student. Refreshments charge per attendee would be $1.00. The cost driver for refreshment is the number of attendees. Postage was based on $0.46 per invitation: 800 invitations were expected to be mailed to faculty and finance business executives. The cost driver for postage is the number of invitations mailed. A gift for the speaker was budgeted at $100 Publicity would consist of flyers and posters placed at strategic locations around cam pas and business offices, articles in the business section of and made in business classes and school newspapers. Printing for the posters and flyers had been prearranged for $50. The speaker lives in the adjoining lives in the adjoining state and had agreed to drive to the presentation at his own expense. Attendance consisted of 450 faculty, business executives, and students An additional 100 invitations were printed and mailed when the Marketing determent decided that selected alumni should also be invited. Based on RSVP responses, the department rented the next size larger room at a cost of $350 for the presentation. The speaker's gift cost was as budgeted. The department chairperson decided to have a four-course dinner, which cost $230. Because of poor planning, the posters and flyers were not distributed as widely as expected. It was decided at the last minute to hire a temporary assistant to make phone calls to alumni. The actual publicity cost was $75. Prepare a flexible budget and compute sales and variable cost variances based on a comparison between the master budget and the flexible budget. Briefly explain the meaning of the activity variances. Compute flexible budget variances by comparing the flexible budget with the actual results. Briefly explain the meaning of the variable cost flexible budget variances. Discuss the fixed cost variances. Calculate the expend and actual fixed cost per attendee. Discuss the sign, finance of the difference in these amounts. Since the department is a not-for-profit entry, why is it important for it to control the cost of sponsoring the distinguished visiting lecture presentation?

Explanation / Answer

Prepare a flexible budget and compute sales and variable cost variances based on a compari- son between the master budget and the flexible budget. Briefly explain the meaning of the activity variances.

a) Master Budget Flexible Budget Variance Units Cost Total Units Cost Total Variable costs: Refereshments 375 $1 $375 450 $1 $450 -$75 U Postage 800 $0.46 $368 900 $0.46 $414 -$46 U Step costs Printing 800 $500 900 $550 -$50 U Facility 400 attendance $250 450 attendance $350 -$100 U Fixed costs Dinner $200 $200 $0 Speaker’s gift $100 $100 $0 Publicity $50 $50 $0 Total Cost $1,843 $2,114 -$271 The volume variances indicate that the department incurred $271 more cost than planned because more people attended the presentation as compared to planned.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.