Question

The St. Lucia Blood Bank, a private charity partly supported by government grants, is located on the Canbbean island of St. Lucia. The blood bank has just finished its operations for September, which was a particularly busy month due to a powerful hurricane that hit neighboring Islands causing many injuries. The hurricane largely bypassed St. Lucia, but residents of St. Lucia willingly donated their blood to help people on other islands. As a consequence, the blood bank collected and processed over 20% more blood than had been originally planned for the month. A report prepared by a government official comparing actual costs to budgeted costs for the blood bank appears below. Continued support from the government depends on the blood bank's ability to demonstrate control over its costs. pears below. Coovernment official ally planned for the blood bank St. Lucia Blood Bank Cost Control Report For the Month Ended September 30 Actual Results Planning Budget Variances Liters of blood collected 880 700 Medical supplies $ 10.453 $ 8,295 $ 2,158 U Lab tests 12.186 10,010 2,176 U Equipment depreciation 1,570 1.300 270 U Rent 1.700 1,700 0 Utilities 298 270 28 U Administration 14 495 14,330 165 U Total expense 40.702 $ 35,905 $ 4.797 U The managing director of the blood bank was very unhappy with this report, claiming that his costs were higher than expected due to the emergency on the neighboring islands. He also pointed out that the additional costs had been fully covered by payments from grateful recipients on the other islands. The government official who prepared the report countered that all of the figures had been submitted by the blood bank to the government: he was just pointing out that actual costs were a lot higher than promised in the budget. The following cost formulas were used to construct the planning budget: Medical supplies Lab tests Equipment depreciation Rent Utilities Administration Cost Formulas $11.859 $14.309 $1,300 $1,700 $270 $1.909 Required: 1. Complete the performance report for September using the flexible budget approach. (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. Do not round Intermediate calculations and round your final answers to nearest whole dollar.)

Answer 1

St. Lucia Blood Bank Flexible Budget Performance Report For The Month Ended September 30
	Actual results	Spending variances		Flexible budget	Activity variances		Planning budget
Medical supplies	$10,453	$25	U	$10,428 (880*$11.85)	$2,133	U	$8,295
Lab tests	12,186	398	F	12,584 (880*$14.30)	2,574	U	10,010
Equipment depreciation	1,570	270	U	1,300	0	None	1,300
Rent	1,700	0	None	1,700	0	None	1,700
Utilities	298	28	U	270	0	None	270
Administration	14,495	12,823	U	1,672 (880*$1.90)	12,658	F	14,330
Total expenses	$40,702	$12,748	U	$27,954	$7,951	F	$35,905