The St. Lucia Blood Bank, a private charity partly supported by government grant

Question

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 September, which was a particularly busy month due to a powerful hurricane that hit neighboring islands causing 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.

*I already did part of it.

St. Lucia Blood Bank Cost Control Report For the Month Ended September 30 Actual Planning Results Budget Variances Liters of blood collected Medical supplies Lab tests Equipment depreciation Rent Utilities Administration 880 700 $ 10,202 S 8,050 $2,152 U 12,330 0,150 2,180 U 2,180 1,900 280 U 1,200 1,200 250 14,185 14,020 0 282 32 U 165 U Total expense $ 40,379 $ 35,570 $4,809 U 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 on the 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. The following cost formulas were used to construct the planning budget: Medical supplies Lab tests Equipment depreciation Rent Utilities Administration $11.50q $14.50q $1,900 $1,200 $250 $12,900 $1.60q Required 1. Complete the performance report for September using the flexible budget approach. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations and round your final answers to nearest whole dollar.)

Explanation / Answer

Actual Flexible Budget Variance Medical Supplies 10202 10120 82 A Lab tests 12330 12760 430 F Equipment Depriciation 2180 1900 280 A Rent 1200 1200 0 Zero variance Utilities 282 250 32 A Administration 14185 14308 123 F Total Expenses 40379 40538 159 F

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