Aunt Janes Inn's most recent monthly expense analysis report revealed significant cost overruns. The manager was asked

to explain the deviations. Below is the "budget v$.$ actual" expense report for the month in question.

The Inn has observed that utilities, water, food service, staff wages, and laundry costs all vary with activity. The other cost

are fixed. The budget reflected above was based upon an assumed $80\%$ occupancy rate. The university's football team

on a winning streak and numerous alumni were returning to campus in October, resulting in a $92\%$ occupancy rate du

the month.

Prepare a $""$flexible budget"" based upon a $92\%$ occupancy rate, and identify whether the Inn is being efficiently or

inefficiently run. Comment on specific costs, and note why a flexible budget can improve performance evaluations.

Hint $-$ Use the table above and leave "actual" column unchanged. Calculate new budgeted and variance columns.