The Saint Lucia Blood Bank, a private charity partly supported by government grants, is located on the Caribbean island of Saint Lucia. The blood bank just finished its operations for September, which was a very busy month because a powerful hurricane caused many injuries on neighboring islands. The hurricane largely bypassed Saint Lucia, but residents of Saint Lucia willingly donated their blood to help people on other islands. As a consequence, the blood bank collected over $20\%$ more blood than 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.

Saint Lucia Blood Bank

Cost Control Report

For the Month Ended September $30$

Actual Results Planning Budget Variances

Liters of blood collected $620500$

Medical supplies $ $9,250$ $ $7,500$ $ $1,750$ U

Lab tests $6,1806,000180$ U

Equipment depreciation $2,8002,500300$ U

Rent $1,0001,0000$

Utilities $57050070$ U

Administration $11,74011,250490$ U

Total expenses $ $31,540$ $ $28,750$ $ $2,790$ U

The managing director of the blood bank was very unhappy with the unfavorable variances in this report, claiming his costs were higher than expected due to the emergency on the neighboring islands. He also pointed out 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 figures had already been submitted by the blood bank to the government; he was just pointing out actual costs were a lot higher than promised in the budget.

The following cost formulas were used to prepare the planning budget:

Cost Formulas

Medical supplies $$15\mathrm{.}00$q

Lab tests $$12\mathrm{.}00$q

Equipment depreciation $$2,500$

Rent $$1,000$

Utilities $$500$

Administration $$10,000+$ $$2\mathrm{.}50$q