Sun Flower Hotel in Washington prepare the Budget for the first quarter of $2018.$ Data

concerning the company$$s operations in August appear below:

Budget Actual Budget

Budget Results for Rooms Rent $............................300350$

Revenue $($$ $200).............................$ $ $60,000$ $ $74,000$

Variable Expenses:

Wages and salaries $..............18,00019,400$

Facility Supports $..............................................6,0006,800$

Power $..............................3,0004,000$

Fixed Expenses:

Depreciation on Facilities

Depreciation on Building $..............................4,5004,500$

Office expenses $.....................12,00013,000$

Total expense $...................................................43,50047,700$

Net operating income $.......................................$ $ $16,500$ $ $26,300$

Required: $1.$ Prepare a $$exible budget and performance report for first quarter of $2018$

$2.$ Which of the variances should be of concern to management? Explain.