The ATK Club in Kolkata, India, organizes an annual get-together of its members on the eve of its foundation day. The original (static) budget and actual results for this year’s program were as follows:

1. Subdivide each variance into a sales-activity variance portion and a flexible-budget variance portion.

2. Provide possible explanations for the variances.

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Attendees Revenue Cost of dinner at 1,520 per person Beverages, 480 per person Rental of the hotel, 6,000 plus 8% tax Music, 3 hours at 20,000 per hour Profit Static Budget 75 €210,000 114,000 36,000 6,480 760,000 (6,480) Actual 90 260,400 141,360 37,280 6,480 70,000 ₹5,280 Variance *50,400 F 27,360 U 1,280 U 0 10,000 U 11,760 F