2. Prepare a flexible budget for the laundry department. What does it tell you? 3. Compute the appropriate labor variances. What do they tell you? 4. What should Mr. Donaldson tell the administrator about his budget variances? SPRUCE STREET SHELTER Exhibit 1. Performance Report -- Laundry Department October-December (Over) % (Over) Under Under Budget Actual Budget Budget Client nights 9,500 11,900 (2,400) (25) Pounds of laundry processed 125,000 156,600 (31,600) (25) Costs Laundry labor $9,000 $12,512 $(3,512) (39) Supplies 1,125 1,875 (750) (67) Water and water heating and softening 1,750 2,500 (750) (43) Maintenance 1,375 2,200 (825) (60) Supervisor's salary 3,125 3,750 (625) (20) Allocated administrative costs 4,000 5,000 (1,000) (25) Equipment depreciation 1,250 1,250 0 Total $21,625 $29,087 $(7,462) (35)