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 just finished its operations for September, which was a very busy month because a powerful hurricane caused many injuries on neighboring islands. 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 over 20 percent more blood than 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 $9,250 $ 7,500 $1,750 U Lab tests 6,180 6,000 180 U Equipment depreciation 2,800 2,500 300 U Rent 1,000 1,000 Utilities 570 500 70 U Administration 11,740 11,250 490 U Total expense $31,540 $28,750 $2,790 U Page 433 The managing director of the blood bank was very unhappy with the unfavorable variances in this report, claiming his costs were higher than expected due to the emergency on the neighboring islands. He also pointed out 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 figures had already been submitted by the blood bank to the government; he was just pointing out actual costs were a lot higher than promised in the budget. The following cost formulas were used to prepare the planning budget: Medical supplies Lab tests Equipment depreciation Rent Utilities Administration Cost Formulas $15.00q $12.00q $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 on think any of the variances in the report on prepared should be invectionted? What?