2. Hallmark is a charity supported by donations that provides free meals to the homeless. The budget for August was based on 3,000 meals. The director has provided the following cost data to use in the budget: groceries, $3.85 per meal; kitchen operations, $4,600 per month plus $1.15 per meal; administrative expenses, $3,800 per month plus $0.85 per meal; and fundraising expenses, $1,600 per month. The director has also provided the statement of actual expenses for the month:

Hallmark Statement of Expenses

For the month ended August 31

Actual meals 2,900 meals

Groceries $10,735

Kitchen operations 8,155

Administrative expenses 6,305

Fundraising expenses 1,620

Total expense $26,815 Required: Prepare a flexible budget performance report showing both the activity variances and the spending variances for each of the expenses and for total expenses for August. Label each variance as favorable (F) or unfavorable (U).