Beta Alpha Psi, the accounting honorary fraternity, held a homecoming party. The fraternity expected attendance of 80 persons and prepared the following budget: Room rental .. $ 170 Food 660 Entertainment .. 570 Decorations ... 210 Total $1,610 After Beta Alpha Psi paid all the bills for the party, the total cost came to $1,885 or $275 over budget. Details are $170 for room rental; $875 for food; $570 for entertainment; and $270 for decorations. Ninety-six persons attended the party. 1. Prepare a performance report for the party that shows how actual costs differed from the budget. That is, include in your report the budgeted amounts, actual amounts, and variances. 2. Suppose the fraternity uses a management-by-exception rule. Which costs deserve further examination

Beta Alpha Psi

1. Performance Report for the party:

                                                        Budget         Actual        Variance

Expected attendance (persons)        80                96               16

Room rental ..                                 $ 170            $170              $0

Food                                          660              875              $215 U

Entertainment ..                               570              570              $0

Decorations ...                                  210              270               $60 U

Total                                       $1,610         $1,885             $275 U

2. The costs that deserve further examination are Food and Decorations.  The party overspent on these items.

Explanation:

Since 96 persons attended the party, the food cost should have been  = $792 ($660/80 * 96), which is the flexible budget cost.  The cost of decorations should have remained $210 unless there were improper estimates of the items required for the decorations and the size of the party venue.

answer; (a) conduct a worksite inspection;

correct, but each time you dont pay the price of the penalty can increase.