The following cost formulas were used to construct the planning budget: beque ES Cost Formulas Medical supplies .. Lab tests .... Equipment depreciation Rent Utilities Administration. $15.00 $12.00 $2,500 $1,000 $500 $10,000 + $2.50q Required: 1. Using Exhibit 9-8 as your guide, prepare a flexible budget performance report for September 2. Do of the variances in the report you prepared should be investigated? Why? any you think LO9-4 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 Septem- ber, which was a very busy month due to a powerful hurricane that hit neighboring islands caus- ing many injuries. The hurricane largely bypassed St. Lucia, but residents of St. Lucia willingly donated their blood to help people on other islands. As a consequence, the blood bank collected and processed over 20% 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. Continued support from the government depends on the blood bank's ability to demonstrate control over its costs. St. Lucia Blood Bank Cost Control Report For the Month Ended September 30 Actual Planning Results Budget Variances Liters of blood collected 620 500 Medical supplies Lab tests. Equipment depreciation Rent Utilities Administration $ 9,250 6,180 2,800 1,000 570 11,740 $31,540 $ 7,500 6,000 2,500 1,000 500 11,250 $28,750 $1,750 U 180 U 300 U 0 70 U 490 U $2,790 U Total expense 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 neighboring islands. He also pointed out that the additional costs had been fully covered by payments from grateful recipients 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. on the