4. 360 points value The St. Lucia Blood Bank, a private charity partly supported

Question

4. 360 points value 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 ongi nally 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 Planning Variances Results Budget Variances Liters of blood collected Medical supplies Lab tests Equipment depreciation Rent Utilities Administration 800 $ 11,394 S 9,240 11,520 2,000 1,500 250 14,720 2,154 U 2,176 U 240 U 13,696 2,240 1,500 278 14.870 $43,978 28 U 150 U Total expense 39,230 S 4,748 U

Explanation / Answer

Actual Spending variances Flexible budget Activity variances Planning budget Medical supplies 11394 75 U 11319 2079 U 9240 Lab tests 13696 416 F 14112 2592 U 11520 Equipment depreciation 2240 240 U 2000 0 None 2000 Rent 1500 0 None 1500 0 None 1500 Utilities 278 28 U 250 0 None 250 Administration 14870 192 F 15062 342 U 14720 Total expense 43978 265 F 44243 5013 U 39230

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