Theodore's Theatre is a nonprofit organization devoted to staging plays for children. The theater has a very small full-time professional administrative staff. Through a special arrangement with the actors’ union, actors and directors rehearse without pay and are paid only for actual performances. Theodore's Theatre had tentatively planned to put on five different productions with a total of 60 performances. For example, one of the productions was Peter Rabbit, which had a five-week run with three performances on each weekend.
The costs from the current year’s planning budget appear below.

Theodore's Theatre
Costs from the Planning Budget
For the Year Ended December 31
Budgeted number of productions 8
Budgeted number of performances 70
Actors and directors wages $175,000
Stagehands wages 31,500
Ticket booth personnel and ushers wages 16,800
Scenery, costumes, and props 68,000
Theater hall rent 52,500
Printed programs 13,300
Publicity 20,800
Administrative expenses 42,000
Total $419,900

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 60% of the budgeted costs are fixed, 20% depend on the number of productions staged, and the remaining 20% depend on the number of performances.
After the beginning of the year, the board of directors of the theater authorized expanding the theater’s program to seven productions and a total of 74 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 below:

Theodore's Theatre
Actual Costs
For the Year Ended December 31
Actual number of productions 7
Actual number of performances 74
Actors and directors wages $179,000
Stagehands wages 33,100
Ticket booth personnel and ushers wages 18,300
Scenery, costumes, and props 64,300
Theater hall rent 57,100
Printed programs 13,750
Publicity 19,800
Administrative expenses 40,450
Total $425,800

Required:
1. Prepare a flexible budget for Theodore's Theatre based on the actual activity of the year.
2. Prepare a report for the year that shows the spending variances for all expense items.
3. Prepare a report for the year that shows the spending variances for all expense items. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i. e., zero variance). Input all amounts as positive values.)