PROBLEM $9-21$ Performance Report for a Nonprofit Organization LO$9-1,$ LO$9-2,$ LO$9-3,$ LO$9-4$

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 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.

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:

Required:

Using $$ Exhibit $9-8$ as your guide, prepare a flexible budget performance report for September.

Do you think any of the variances in the report you prepared should be investigated? Why?