1 Part 2 2 A small local blood bank has been trying to support the needs of the community, and has processed 3 20% more

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1 Part 2 2 A Small Local Blood Bank Has Been Trying To Support The Needs Of The Community And Has Processed 3 20 More 1 (98.23 KiB) Viewed 55 times

1 Part 2 2 A small local blood bank has been trying to support the needs of the community, and has processed 3 20% more blood than had been originally planned for the month. The following is a cost control report. 4 5 Blood Bank 6 Cost Performance report 7 For the Month ended April 20XX 8 9 Actual Budget Variance 10 11 Liters of blood collected 500 400 100 12 13 Variable Costs: 14 Medical Supplies 500 U $8,500 $8,000 $ 6,800 15 Lab Tests 6,000 800 U 16 Refreshment for Donors 1,200 1,100 100 U 17 Administrative supplies 550 17,050 400 15,500 150 U 1,550 U 18 Total variable costs 19 20 Fixed Costs 21 Staff Salaries $10,000 $10,000 0 15 U 22 Equipment Depreciation 2,795 2,780 23 Rent 1,000 1,000 24 Insurance 540 530 10 U 25 Total Fixed Costs 14,335 14,310 25 U 26 Total Cost 31,385 29,810 1,575 U 27 28 29 The managing director of the blood bank was very unhappy with this report, claiming that his costs were higher 30 than expected due to the emergencies in the community. The managing director has heard that you just finished a 31 course that discussed flexible budgets. He has asked you to assist him in developing a flexible budget that 32 will show his superiors that he has controlled costs in most areas. 33 Required: 34 1. Prepare a revised budget for April using the flexible performance approach. 35 You need to use cell reference to calculate the variance. You must designate a variance for each cost category and for the total cost: U or F. 36 The variable and fixed cost labeling has been set correctly, so do not change this around. 37 2. Comment on how you developed this revised report and what it means. You must explicitly explain how you computed the numbers in the revised cost control report. 38 3. Explain which variances in the report you prepared should be investigated. Why? Do not answer that no variances should be investigated, since the Blood Bank is concerned with safety issues that might be impacted by changes in cost. 39 Solution: 40 Blood Bank 41 Revised Cost Performance report For the Month ended April 20XX 42
40 Blood Bank 41 Revised Cost Performance report 42 For the Month ended April 20XX 43 44 Actual Budget Variance U or F 45 46 Liters of blood collected 47 48 Variable Costs: 49 Medical Supplies 50 Lab Tests 51 Refreshment for Donors 52 Administrative supplies 53 Total variable costs 54 55 Fixed Costs 56 Staff Salaries 57 Equipment Depreciation 58 Rent 59 Insurance 60 Total Fixed Costs 61 Total Cost 62 2. Comment on how you developed this revised report and what it means. You must explicitly explain how you computed the numbers in the revised cost control report. 63 64 65 66 3. Explain which variances in the report you prepared should be investigated. Why? Do not answer that no variances should be investigated, since the Blood Bank is concerned with safety issues that might be impacted by changes in cost. 67 68 % 69 70712374 75 76 7 78 79 80 81 77