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 ts 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. St. Lucia Blood Bank Cost Control Report For the Month Ended September 30 Actual Planning Results Budget Variances 880 Liters of blood collected Medical supplies Lab tests Equipment depreciation Rent Utilities Administration 700 S 10,165 S 8,015 $2,150 U 12,322 10,150 2,172 U 2,060 1,800 260 U 1,600 1,600 276 250 26 U 13,920 13,760 160 U Total expense $ 40,343 35,575 $4,768 U

Explanation / Answer

$10,076

(880×11.45)

$12,760

(880×$14.5)

actual results spending variance flexible budget activity variance planning budget Liters of blood collected 880 880 700 Medical supplies $10,165 $89 U

$10,076

(880×11.45)

$2061 U $8,015 Lab tests $12,322 438 F

$12,760

(880×$14.5)

$2,610 U $10,150 Equipment depreciation $2,060 260 U $1,800 0 $1,800 Rent $1,600 0 $1,600 0 $1,600 Utilities $276 26 U $250 0 $250 Administration $13,920 164 F $14,084 324 U $13,760 Total expense $40,343 $227 F $40,570 $4,995 U $35,575

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