Part one question data - 2

Assignment 1. What is your assessment of the method the administrator used to construct the budget? 2. Prepare a flexible budget for the laundry department. What does it tell you? 3. Compute the appropriate labor variances. What do they tell you? 4. What should Mr. Donaldson tell the administrator about his budget variances? SPRUCE STREET SHELTER Exhibit 1. Performance Report -- Laundry Department October - December (Over) % (Over) Under Under Budget Actual Budget Budget Client nights 9,500 11,900 Pounds of laundry processed (2,400) 125,000 156,600 (31,600) (25) (25) Costs Laundry labor $9,000 $12,512 Supplies $(3,512) (39) 1,125 Water and water heating and softening 1,875 (750) (67) 1,750 2,500 Maintenance (750) (43) 1,375 2,200 3,125 (825) (60) Supervisor's salary 3,750 Allocated administrative costs (625) (20) 4,000 5,000 Equipment depreciation (1,000) (25) 1,250 1,250 0 Total $21,625 $29,087 $(7,462) (35)