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The KGV 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 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 is given below. (The currency on St. Lucia is the East Caribbean dollar.) Continued support from the government depends on the blood banks ability to demonstrate control over its costs.

KGV Blood Bank Cost Control Report For the Month Ended September 30
	Planning Budget		Actual Results		Variances
Liters of blood collected		700		880
Medical supplies	$	8,085	$	10,227	$	2,142	U
Lab tests		9,975		12,147		2,172	U
Equipment depreciation		1,400		1,600		200	U
Rent		1,700		1,700		0
Utilities		260		284		24	U
Administration		14,325		14,590		265	U
Total expense	$	35,745	$	40,548	$	4,803	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	$11.55q
Lab tests	$14.25q
Equipment depreciation	$1,400
Rent	$1,700
Utilities	$260
Administration	$13,100 + $1.75q

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.)

KGV Blood Bank Flexible Budget Performance Report For the Month Ended September 30 Planning Budget Flexible Budget Actual Results Activity Variances Spending Variances Medical supplies Lab tests Equipment depreciation Rent Utilities Administration Total expense 8,085 9,975 1,400 1,700 260 14,325 $35,745 $ 10,227 12,147 1,600 1,700 284 14,590 $40,548

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