Question

Liters of blood collected Results Budget Variances 620 500 Medical supplies $10,350 $ 8,500 $1,850 U Lab tests 6,235 6,000 235 U Equipment depreciation 3,955 3,620 355 U Rent 1,550 1,550 Utilities 867 775 92 U Administration 12,595 12,050 545 U Total expense $35,552 $32,475 $3,077 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 $17.00g $12.000 $3,600 $1,550 $775 $10,550 + $3.00 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.) St. Lucia Blood Bank Flexible Budget Performance Report For the Month Ended September 30 Actual Flexible Results Budget Planning Budget Liters of blood collected 620 500 Medical supplies Labtests Equipment depreciation Rent Utes Administration Total expense 10.350) 6.235 3,955 1,550 8671 127595 $ 8,500 6,000 3,600 1,550 775 12,050 $32,475 35,552

Answer 1

St. Lucia Blood Bank Flexible Budget Performance Report For the Month Ended September 30 Actual Flexible Spending Variance Result Budget 620 620 Activity Variance Planning Budget 500 Liters of blood collected Medical supplies Lab tests Equip. depreciation Rent Utilities Administration Total Expenses $10,350 $6,235 $3,955 $1,550 $867 $12,595 $35,552 $190 Favorable $1,205 Favorable $355 Unfavorable $0 No Variance $92 Unfavorable $185 Unfavorable $763 Favorable $10,540 $7,440 $3,600 $1,550 $775 $12,410 $36,315 $2,040 Unfavorable $1,440 Unfavorable $0 No Variance $0 No Variance $0 No Variance $360 Unfavorable $3,840 Unfavorable $8,500 [Flexible = $620 x $17 = $10540] $6,000 (Flexible = $620 x $12 = $7440] $3,600 (Fixed] $1,550 (Fixed] $775 [Fixed] $12,050 [Flexible = $10550 + (620 x $3) = $12410] $32,475

Workings: (b) - (a) Variance NOTE: (a) (b) Flexible Actual 620 620 $10,540 $10,350 $7,440 $6,235 $3,600 $3,955 $1,550 $1,550 $775 $867 $12,410 $12,595 $36,315 $35,552 $190 -$1,205 $355 Liters of blood collected Medical supplies Lab tests Equip. depreciation Rent Utilities Administration Total Expenses For Expenses and Total Expenses, if actual is lower than flexible budget, it is favorable otherwise unfavorable. If flexible budget is less than planning budget, it is favorable, otherwise, it will be unfavorable. $0 $92 $185 $763 Accordingly, U & Fare assigned against each line item in the Flexible Budget Performance Report presented above.