The Munchkin Theater is a nonprofit organization devoted to staging plays for ch
ID: 2465422 • Letter: T
Question
The Munchkin Theater 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 costs from the current year’s planning budget appear below. The Munchkin Theater had tentatively planned to put on six different productions with a total of 50 performances. For example, one of the productions was Peter Rabbit, which had five performances.
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 pin down, but the best estimate is that approximately 70% of the budgeted costs are fixed, 20% depend on the number of productions staged, and the remaining 10% depend on the number of performances.
After the beginning of the year, the board of directors of the theater authorized changing the theater’s program to five productions and a total of 54 performances. Actual costs were higher than the costs from the planning budget. (Grants from donors and ticket sales were also correspondingly higher, but are not shown here.) Data concerning the actual costs appear below:
Complete the flexible budget performance report for the year that shows both activity variances and spending variances. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)
The Munchkin Theater 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 costs from the current year’s planning budget appear below. The Munchkin Theater had tentatively planned to put on six different productions with a total of 50 performances. For example, one of the productions was Peter Rabbit, which had five performances.
Explanation / Answer
Ans 1 The Munchkin Theater The Munchkin Theater For the Year Ended December 31 Actual Standard Actual cost per performance/production Budget cost per performance/production B Nature of expense Basis Flexible Budget (Actual* Budgeted Cost per prod/performance) B*A/C Actual number of productions A 5 6 For the Year Ended December 31 Actual number of performances C 54 50 Actors’ and directors’ wages 162000 Actors’ and directors’ wages 156000 150000 2888.89 3000 Variable No.of performance Stagehands’ wages 27000 Stagehands’ wages 26600 25000 492.59 500 Variable No.of performance Ticket booth personnel and ushers’ wages 17280 Ticket booth personnel and ushers’ wages 17500 16000 324.07 320 Variable No.of performance Scenery, costumes, and props 45000 Scenery, costumes, and props 50300 54000 10060.00 9000 Variable No.of production Theater hall rent 43200 Theater hall rent 44600 40000 825.93 800 Variable No.of performance Printed programs 14580 Printed programs 13950 13500 258.33 270 Variable No.of performance Publicity 1740 Publicity 16400 17400 303.70 348 Variable No.of production Administrative expenses 8000 Administrative expenses 9290 9600 1858 1600 Variable 20% No. of production Administrative expenses 5184 Administrative expenses 4645 4800 86.02 96 Variable 10%(performance) Administrative expenses 33600 Administrative expenses (Fixed) 32515 33600 32515 33600 Fixed 70%, Total Administrative Expenses 46784 Total Administrative Expenses 46450 48000 Total 357584 Total 371800 363900 The Munchkin Theater Flexible Budget Performance Report For the Year Ended December 31 Budgeted Z Activity Variances Y-Z Variance Flexible Budget Y Spending Variances V-Y Actual V Actors' and directors' wages 150000 12000 U 162000 -6000 F 156000 Stagehands' wages 25000 2000 U 27000 -400 F 26600 Ticket booth personnel and usher wages 16000 1280 U 17280 220 U 17500 Scenery, costumes, and props 54000 -9000 F 45000 5300 U 50300 Theater hall rent 40000 3200 U 43200 1400 U 44600 Printed programs 13500 1080 U 14580 -630 F 13950 Publicity 17400 -15660 F 1740 14660 U 16400 Administrative expenses 48000 -1216 F 46784 -334 F 46450 Total 363900 -6316 $ 357584 14216 371800
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