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The St. Lucia 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 neighbouring islands, causing many injuries. The hurricane largely bypassed St. Lucia, but the residents of St. Lucia willingly donated their blood to help people on other islands. As a consequence, the blood bank collected and processed 24% 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 appears below. (The currency on St. Lucia is the East Caribbean dollar.) Continued support from the government depends on the blood bank's ability to demonstrate control over its costs. Budget Variance 360 F ST. LUCIA BLOOD BANK Cost Control Report For the Month Ended September 30 Actual Litres of blood collected 95e Variable costs: Medical supplies $ 8,900 Lab tests 18,280 Refreshments for donors 2,140 Administrative supplies 568 Total variable cost 21.888 Fixed costs: Staff salaries 15,500 Equipment depreciation 4,400 1,550 Utilities Total fixed cost 22,180 Total cost $44,060 $ 7,500 7,888 1,358 210 16,860 $ 1,400 U 2,480 U 798 U 350 U 5,620 U 1,100 U Rent 730 15, see 3, 30e 1,550 580 20,938 $37,790 150 U 1,25eu $ 6,270 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 neighbouring 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. Required: 1. Prepare a new performance report for September using the flexible budget approach. (Note: Even though some of these costs might be classified as direct costs rather than overhead, the flexible budget approach can still be used to prepare a flexible budget performance report.). (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero verlance). Round "Cost Formula" answers to 2 decimal places) ST. LUCIA BLOOD BANK Flexible Budget Performance Report For The Month Ended September 30 Actual Spending or Budget Variance Flexible Budget Static Budget Cost Formula (Per Litre) Activity-Level (litres) 960 960 600 Variable costs: Medical supplies Lab tests Refreshments for donors Administrative supplies Total variable cost Fixed costs: Staff salaries Equipment depreciation Rent Utilities Total fixed cost Total cost
