Question

The Little Theatre is a nonprofit organization devoted to staging plays for children. The theater has a very small full-time professional administrative staff. Through a special arrangement with the actors' union, actors and directors rehearse without pay and are paid only for actual performances. The Little Theatre had tentatively planned to put on six different productions with a total of 108 performances. For example, one of the productions was Peter Rabbit, which had a six-week run with three performances on each weekend. The costs from the current year's planning budget appear below. The Little Theatre Costs from the Planning Budget For the Year Ended December 31 Budgeted number of productions Budgeted number of performances 6 108 Actors and directors wages Stagehands wages Ticket booth personnel and ushers wages Scenery, costumes, and props Theater hall rent Printed programs Publicity Administrative expenses Total $ 222,480 38,880 22,680 108,360 60,480 33,480 12,360 50,760 $ 549,480 Some of the costs vary with the number of productions, some with the number of performances, and some are fixed and depend on neither the number of productions nor the number of performances. The costs of scenery, costumes, props, and publicity vary with the number of productions. It doesn't make any difference how many times Peter Rabbit is performed, the cost of the scenery is the same. Likewise, the cost of publicizing a play with posters and radio commercials is the same whether there are 10, 20, or 30 performances of the play. On the other hand, the wages of the actors, directors, stagehands, ticket booth personnel, and ushers vary with the number of performances. The greater the number of performances, the higher the wage costs will be. Similarly, the costs of renting the hall and printing the programs will vary with the number of performances. Administrative expenses are more difficult to analyze, but the best estimate is that approximately 75% of the budgeted costs are fixed, 15% depend on the number of productions staged, and the remaining 10% depend on the number of performances

Answer 1

	Flexible budget
Actual number of productions					7
Actual number of perormances					168
Actors and directors wages
Stagehands wages					60480
Ticket booth personnel and usher's wages					35280
Scenery,costumes and props					126420
Theater hall rent					94080
printed programs					52080
publicity					14420
administrative expenses					54849
total					437609
				Actual	Revenue and		Flexible
				results	spending variance		budget
Number of productions				7			7
number of performances				168			168
Actors and directors wages				358,100	12,020	U	0
Stagehands wages				59,600	880	F	60480
Ticket booth personnel and usher's wages				36,400	1,120	U	35280
Scenery,costumes and props				130,900	4,480	U	126420
Theater hall rent				87,300	6,780	F	94080
printed programs				47,600	4,480	F	52080
publicity				15,700	1,280	U	14420
administrative expenses				55,800	951	U	54849
total				791,400	353,791	U	437609