Please show your work in the answer. 5.00 points The Little Theatre is a nonprof
ID: 2601493 • Letter: P
Question
Please show your work in the answer. 5.00 points The Little Theatre is a nonprofit organization devoted to staging plays for children. The theatre has a very small full-time professional administrative stff. Through a special arrangement with the actors' union, actors and directors rehearse without pay and are paid only for actual The costs from the current year's planning budget appear below. 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. Costs from the Planning Budget Actors and drectors'wages 216,000 Soenery, costumes, and props Theatre hal rent 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 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. After the beginning of the year, the board of directors of the theatre authorized expanding the theatre's program to seven productions and a total of 168 performances. Not surprisingly actual costs were considerably 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 belowExplanation / Answer
1. The cost formulas for The Little Theatre appear below, where q1 is the number of productions and q2 is the number of performances: o Actors’ and directors’ wages: $2,000q2. Variable with respect to the number of performances. $2,000 = $216,000 ÷ 108. o Stagehands’ wages: $300q2. Variable with respect to the number of performances. $300 = $32,400 ÷ 108. o Ticket booth personnel and ushers’ wages: $150q2. Variable with respect to the number of performances. $150 = $16,200 ÷ 108. o Scenery, costumes, and props: $18,000q1. Variable with respect to the number of productions. $18,000 = $108,000 ÷ 6. o Theater hall rent: $500q2. Variable with respect to the number of performances. $500 = $54,000 ÷ 108. o Printed programs: $250q2. Variable with respect to the number of performances. $250 = $27,000 ÷ 108. o Publicity: $2,000q1. Variable with respect to the number of productions. $2,000 = $12,000 ÷ 6. o Administrative expenses: $32,400 + $1,080q1 +$40q2. o $32,400 = 0.75 × $43,200 o $1,080 = (0.15 × $43,200) ÷ 6 o $40 = (0.10 × $43,200) ÷ 108 The Little Theatre Flexible Budget For the Year Ended December 31 Actual number of productions (q1) 7 Actual number of performances (q2) 168 Actors’ and directors’ wages ($2,000q2) $336,000 Stagehands’ wages ($300q2) 50,400 Ticket booth personnel and ushers’ wages ($150q2) 25,200 Scenery, costumes, and props ($18,000q1) 126,000 Theater hall rent ($500q2) 84,000 Printed programs ($250q2) 42,000 Publicity ($2,000q1) 14,000 Administrative expenses ($32,400 + $1,080q1 +$40q2) 46,680 Total expense $ 724,280 The Little Theatre Flexible Budget Performance Report For the Year Ended December 31 Actual Spending Variances Flexible Budget Activity Variances Planning Number of productions (q1) 7 7 6 Number of performances (q2) 168 168 108 Actors'/directors' wages $ 341,800 $ 5,800 U $336,000 $ 120,000 U $ 216,000 Stagehands' wages 48,700 700 F 50,400 18,000 U 32,400 Ticket booth/ushers' wages 25,900 700 U 25,200 9,000 U 16,200 Scenery,costumes 130,600 4,600 U 126,000 18,000 U 108,000 Theatre hall rent 78,000 6,000 F 84,000 30,000 U 54,000 Printed Programs 38,300 3,700 F 42,000 15,000 U 27,000 Publicity 15,100 1,100 U 14,000 2,000 U 12,000 Admin Exp 47,500 820 U 46,680 3,480 U 43,200 Total $ 726,900 $ 2,620 U $ 724,280 $ 215,480 U $ 508,800