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 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:

  
Required:

1.Complete the flexible budget performance report for September. (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.)

St. Lucia Blood Bank
Cost Control Report
For the Month Ended September 30 Actual Results Planning Budget Variances Liters of blood collected 540 420 Medical supplies $ 10,710 $ 8,820 $ 1,890 U Lab tests 5,943 5,712 231 U Equipment depreciation 4,795 4,400 395 U Rent 1,950 1,950 0 Utilities 1,083 975 108 U Administration 13,131 12,546 585 U Total expense $ 37,612 $ 34,403 $ 3,209 U

Explanation / Answer

Actual Results Spending variances Flexible budget Activity variances Planning budget Liters of blood collected 540 540 420 Medical supplies 10710 630 F 11340 2520 U 8820 Lab tests 5943 1401 F 7344 1632 U 5712 Equipment depreciation 4795 395 U 4400 0 None 4400 Rent 1950 0 None 1950 0 None 1950 Utilities 1083 108 U 975 0 None 975 Administration 13131 129 U 13002 456 U 12546 Total expense 37612 1399 F 39011 4608 U 34403

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.