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.

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.

Explanation / Answer

Performance Report for September:

Actual results Spending variances Flexible Budget Activity variances Planning Budget Medical supplies 7,950 62 U 7,888 2,088 U 5,800 Lab tests 9,313 377 F 9,690 2,565 U 7,125 Equipment depreciation 1,560 260 U 1,300 None 1,300 Rent 1,500 None 1,500 None 1,500 Utilities 328 28 U 300 None 300 Administration 14,200 156 F 14,356 306 U 14,050 Total expense 34,851 183 F 35,034 4,959 U 30,075

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