Presentation

Review the scenario and watch this weeks videos before you complete the activity below. This scenario can also be found in the Problems Series A section 8-19A of Ch. 8, Performance Evaluation of Fundamentals of Managerial Accounting Concepts. Scenario: The Redmond Management Association held its annual public relations luncheon in April Year 2. Based on the previous years results, the organization allocated $25,290 of its operating budget to cover the cost of the luncheon. To ensure that costs would be appropriately controlled, you, the treasurer, prepared the following budget for the Year 2 luncheon. Use Excelshowing all work and formulasto complete the following: Prepare a flexible budget. Compute the sales volume variance and the variable cost volume variances based on a comparison between the master budget and the flexible budget. Compute flexible budget variances by comparing the flexible budget with the actual results. Mr. Snow was extremely upset with the budget deficit. He immediately called you, the treasurer, to complain about the budget variance for the meal cost. He told you that the added dessert caused the meal cost to be $4,810 ($25,110-$20,300) over budget. He added, I could expect a couple hundred dollars one way or the other, but several thousand is totally unacceptable. At the next budget meeting of the budget committee, I want you to explain what happened. Create a 6-slide presentation for the budget committee meeting. Complete the following in your presentation: Summarize the results of the sales volume and variable cost volume variances computations based on the comparison between the master budget and the flexible budget. (This means to explain in writing what the results are between the Flexible Budget and the Master Budget Variances and; what may have caused the variances). Summarize the results of the flexible budget variances computations based on the comparison between the flexible budget and the actual results. (This means to explain in writing what the results of the variances are based on the comparison between the Flexible budget and the actual results and;, what may have caused the variances). Justify the favorable or unfavorable budget variances. (This means to explain in writing what the results of overall total variances (net surplus or deficit) are and, what may have caused the variances.) Since this is a not-for-profit organization, address why anyone should be concerned with meeting the budget. (This means to explain in writing why anyone would be concerned with the budget) Make recommendations for what can be done differently to stay on budget for future luncheons. Provide specific examples to support your recommendations. (This means to explain in writing what can be done differently to eliminate unfavorable variances for future luncheons)