Required:

1. Prepare a revised budget for April using the flexible performance approach.

You need to use cell reference to calculate the variance . You must designate a variance for each cost category and for the total cost: U or F.

The variable and fixed cost labeling has been set correctly, so do not change this around.

2. Comment on how you developed this revised report and what it means. You must explicitly explain how you computed the numbers in the revised cost control report.

3. Explain which variances in the report you prepared should be investigated. Why? Do not answer that no variances should be investigated, since the Blood Bank is concerned with safety issues that might be impacted by changes in cost.

3. Explain which variances in the report you prepared should be investigated. Why? Do not answer that no variances should be investigated, since the Blood Bank is concerned with safety issues that might be impacted by changes in cost.

A small local blood bank has been trying to support the needs of the community, and has processed 20% more blood than had been originally planned for the month. The following is a cost control report. Blood Bank Cost Performance report For the Month ended April 20XX Actual Budget Variance Liters of blood collected 500 400 100 $ $ Variable Costs: Medical Supplies Lab Tests Refreshment for Donors Administrative supplies 8,500 $ 6,800 1,200 550 17,050 8,000 6,000 1,100 400 15,500 500 U 800 U 100 U 150 U 1,550 U Total variable costs Fixed Costs Staff Salaries Equipment Depreciation Rent Insurance $ 10,000 $ 10,000 2,795 2,780 1,000 1,000 540 530 14,335 14,310 31,385 29,810 0 15 U 0 10 U 25 U 1,575 U Total Fixed Costs Total Cost The managing director of the blood bank was very unhappy with this report, claiming that his costs were higher than expected due to the emergencies in the community. The managing director has heard that you just finished a course that discussed flexible budgets. He has asked you to assist him in developing a flexible budget that will show his superiors that he has controlled costs in most areas. Blood Bank Revised Cost Performance report For the Month ended April 20XX Actual Budget Variance U or F Liters of blood collected Variable Costs: Medical Supplies Lab Tests Refreshment for Donors Administrative supplies Total variable costs Fixed Costs Staff Salaries Equipment Depreciation Rent Insurance Total Fixed Costs Total Cost 2. Comment on how you developed this revised report and what it means. You must explicitly explain how you computed the numbers in the revised cost control report. A small local blood bank has been trying to support the needs of the community, and has processed 20% more blood than had been originally planned for the month. The following is a cost control report. Blood Bank Cost Performance report For the Month ended April 20XX Actual Budget Variance Liters of blood collected 500 400 100 $ $ Variable Costs: Medical Supplies Lab Tests Refreshment for Donors Administrative supplies 8,500 $ 6,800 1,200 550 17,050 8,000 6,000 1,100 400 15,500 500 U 800 U 100 U 150 U 1,550 U Total variable costs Fixed Costs Staff Salaries Equipment Depreciation Rent Insurance $ 10,000 $ 10,000 2,795 2,780 1,000 1,000 540 530 14,335 14,310 31,385 29,810 0 15 U 0 10 U 25 U 1,575 U Total Fixed Costs Total Cost The managing director of the blood bank was very unhappy with this report, claiming that his costs were higher than expected due to the emergencies in the community. The managing director has heard that you just finished a course that discussed flexible budgets. He has asked you to assist him in developing a flexible budget that will show his superiors that he has controlled costs in most areas. Blood Bank Revised Cost Performance report For the Month ended April 20XX Actual Budget Variance U or F Liters of blood collected Variable Costs: Medical Supplies Lab Tests Refreshment for Donors Administrative supplies Total variable costs Fixed Costs Staff Salaries Equipment Depreciation Rent Insurance Total Fixed Costs Total Cost 2. Comment on how you developed this revised report and what it means. You must explicitly explain how you computed the numbers in the revised cost control report