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

Explanation / Answer

Actual 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

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