The Zachary Management Association held its annual public relations luncheon in
ID: 2508731 • Letter: T
Question
The Zachary Management Association held its annual public relations luncheon in April 2017. Based on the previous year’s results, the organization allocated $31,202 of its operating budget to cover the cost of the luncheon. To ensure that costs would be appropriately controlled, Molly Hubbard, the treasurer, prepared the following budget for the 2017 luncheon.
The budget for the luncheon was based on the following expectations.
Actual results for the luncheon follow.
Reasons for the differences between the budgeted and actual data follow.
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.
b. Compute flexible budget variances by comparing the flexible budget with the actual results.
ZACHARY MANAGEMENT ASSOCIATION Public Relations Luncheon Budget April 2017 Operating funds allocated $ 31,202 Expenses Variable costs Meals (1,590 × $13.70) 21,783 Postage (3,950 × 0.82) 3,239 Fixed costs Facility 2,900 Printing 1,140 Decorations 1,030 Speaker's gift 320 Publicity 790 Total expenses 31,202 Budget surplus (deficit) $ 0Explanation / Answer
a.
b.
Flexible Budget Operating funds allocated 31202 Expenses Variable costs Meals (1,810 x 13.70) 24797 Postage 94,950 x 0.82) 4059 Fixed Costs Facility 2900 Printing 1140 Decoration 1030 Speaker's Gift 320 Publicity 790 Total Expenses 35036 Budget Surplus / (Deficit) -3834Related Questions
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