Question

The Children’s Hour Theatre is a local nonprofit organization that stages plays for children while allowing individuals who aspire to work in theatre an opportunity to try the craft. The theatre has a small administrative staff and the directors and actors are paid a fee for each performance which includes rehearsals. The Children’s Hour Theatre has planned five different productions with a total of 90 performances for this season. One of the classics presented is Peter and the Wolf. The theatre receives grants from donors to cover short falls from the discounted ticket prices that it charges. Therefore, the theatre only budgets its costs for each season. Some of the costs vary with the number of productions, some with the number of performances and some are fixed.

                                                            Fixed element Variable element         Variable element

                                                            Per season                    Per Production         Per Performance

Director & Actor wages                               $0                               $0                           $2,175

Stagehands wages                                        $0                                 $0                             $285

Ticket Booth & usher wages                       $0                                 $0                              $120

Scenery, costumes & props                         $0                       $20,500                                  $0

Theater hall rent                                           $0                                 $0                              $500

Printed programs                                          $0                                 $0                              $235

Publicity                                              $2,500                             $825                                  $0       

Administrative expenses                     $14,000                             $700                              $100

During the season, the theatre increased its productions to 6 and the performances to 120. The theatre's actual costs for the season are listed below:

The Children’s Hour Theatre

Actual Costs

2019 Season

Director & Actor wages                                              $ 260,250                               

Stagehands wages                                                            34,500

Ticket Booth & usher wages                                           14,800

Scenery, costumes & props                                           120,900

Theatre hall rent                                                               60,000                   

Printed programs                                                              28,060

Publicity                                                                             7,535                               

Administrative expenses                                                  31,245

            Total Expenses                                                $ 557,290

  
Required:

Prepare a flexible budget performance report showing both the company's activity variances and spending variances for the theatre season. Label each variance as favorable (F) or unfavorable (U).

Answer 1

The Children Hour Theatre
Flexible Budget Performance Report
Particulars	Actual	Revenue and spending variances	Flexible Budget	Activity Variances	Planning Budget
Production	6			6			5
Performance	120			120			90
Expenses:
Direct & Wages	$260,250.00	$750.00	F	$261,000.00	$65,250.00	U	$195,750.00
Stagehand Wages	$34,500.00	$300.00	U	$34,200.00	$8,550.00	U	$25,650.00
Ticket Booth & Usher Wages	$14,800.00	$400.00	U	$14,400.00	$3,600.00	U	$10,800.00
Scenery Costumes & Pops	$120,900.00	$2,100.00	F	$123,000.00	$20,500.00	U	$102,500.00
Thatre Hall Rent	$60,000.00	$0.00	None	$60,000.00	$15,000.00	U	$45,000.00
Printed Program	$28,060.00	$140.00	F	$28,200.00	$7,050.00	U	$21,150.00
Pubilicity	$7,535.00	$85.00	U	$7,450.00	$825.00	U	$6,625.00
Administrative Expense	$31,245.00	$1,045.00	U	$30,200.00	$3,700.00	U	$26,500.00
Tototal Expense	$557,290.00	$1,160.00	F	$558,450.00	$124,475.00	U	$433,975.00