Question

The St. Lucia Blood Bank, a private charity partly supported by government grants, is located on the Caribbean island of St. Lucia. The blood bank has just finished its operations for September, which was a very 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. St. Lucia Blood Bank Cost Control Report For the Month Ended September 30 Actual Planning Results Budget Liters of blood collected 6ee 480 Variances Medical supplies $ 1.344 U 182 U 310 Equipment depreciation $ 7.344 $ 6.00 5,078 4,896 3.010 2.700 1.100 1.100 624 550 11,605 11, 103 5 28,764 526,354 Utilities Administration Total expense 74 U See U $2.410 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 Cost Formulas $12.50 $10.289 $2,700 Ueslities Administration 5550 $10,100 + $2.109 Required: 1.Complete the flexible budget performance report for September (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (.e., zero variance). Input all amounts as positive values.) Required: 1.Complete the flexible budget performance report for September. (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.) St. Lucia Blood Bank Flexible Budget Performance Report For the Month Ended September 30 Flexible Budget Actual Results 600 Planning Budget 480 Liters of blood collected Medical Supplies Lab tests Equipment depreciation Rent Utilities 57.344 5.078 3,010 1.100 624 11.608 $ 28.764 6,000 4.896 2.700 1.100 550 Administration 11,108 26.354 Total expense

Answer 1

	Flexible budget = fixed component + actual 600 liters*variable component)
				Flexible Budget Performance Report
		Actual	spending variance		Flexible	Activity variance		planned budget
		resutl			budget
liters of blood collected		600			600			480
Medical supplies		7,344	156	F	7500	1,500	U	6,000
labt tests		5,078	1,042	F	6120	1,224	U	4,896
Equipment depreciation		3,010	310	U	2,700	0	N	2,700
Rent		1,100	0	N	1,100	0	N	1,100
Utilities		624	74	U	550	0	N	550
Administration		11,608	248	U	11360	252	U	11,108
total expense		28,764	566	F	29330	2,976	U	26,354