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. Variances St. Lucia Blood Bank Cost Control Report For the Month Ended September 30 Actual Planning Results Budget Liters of blood collected 980 800 Medical supplies $ 11,516 $ 9,360 Lab tests 13,660 11,480 Equipment depreciation 2,000 1,800 Rent 1,200 1,200 Utilities 292 260 Administration 14,925 14,760 Total expense $ 43,593 $ 38,860 $ 2,156 U 2,180 U 200 U 0 32 U 165 U $ 4,733 U

Answer 1

Answer

• Requirement includes working calculation columns

							Actual Results	Spending Variance		Flexible Budget	Activity variance		Planning Budget
Litres of blood collected (q)	WORKING COLUMNS						980			980			800
Medical Supplies	(	$                      -	)	$    11.70	x 980		$               11,516.00	$               50.00	U	$             11,466.00	$            2,106.00	U	$             9,360.00
Lab Tests	(	$                      -	+	$    14.35	x 980	)	$               13,660.00	$             403.00	F	$             14,063.00	$            2,583.00	U	$          11,480.00
Equipment depreciation	(	$         1,800.00	+		x 980	)	$                 2,000.00	$             200.00	U	$               1,800.00	$                         -	None	$             1,800.00
Rent	(	$         1,200.00	+	$           -	x 980	)	$                 1,200.00	$                      -	None	$               1,200.00	$                         -	None	$             1,200.00
Utilities	(	$            260.00	)	$           -	x 980		$                     292.00	$               32.00	U	$                   260.00	$                         -	None	$                260.00
Administrative	(	$      13,400.00	+	$      1.70	x 980	)	$               14,925.00	$             141.00	F	$             15,066.00	$                306.00	U	$          14,760.00
Total Expenses							$               43,593.00	$             262.00	F	$             43,855.00	$            4,995.00	U	$          38,860.00