Alto Clinic uses patient-visits as its measure of activity. The clinic has provided the following report: Required:

	Planning Budget	Actual Results	Variances
Patient -Visits	$ 2,600	$ 2,700
Revenue ($52.90q)	$ 137,540	$ 145,190	$ 7,650	F
Expenses:
Personnel Expenses ($35,100 + $17.40q)	$ 80,340	$ 79,610	$ (730)	F
Medical Expenses ($1,100 + $6.40q)	$ 17,740	$ 18,660	$ 920	U
Occupancy Expenses ($9,700 + $2.30q)	$ 15,680	$ 16,680	$ 1,000	U
Administrative Expenses ($5,200 + $0.30q)	$ 5,980	$ 5,880	$ (100)	F
Total Expenses	$ 119,740	$ 120,830	$ 1,090	U
Net operating expenses	$ 17,800	$ 24,360	$ 6,560	F

1. Prepare the clinic's flexible budget performance report for June. Label each variance as favorable (F) or unfavorable (U).

2. What aspects of the flexible budget performance report should be brought to managements attention?