CLASSIFYING COSTS AS FIXED AND VARIABLE IN A SERVICE ORGANIZATION Alva Community Hospital has five laboratory technicians who are responsible for doing a series of standard blood tests. Each technician is paid a salary of $30,000. The lab facility represents a recent addition to the hospital and cost $300,000. It is expected to last 20 years. Equipment used for the testing cost $10,000 and has a life expectancy of five years. In addition to the salaries, facility, and equipment, Alva expects to spend

$200,000 for chemicals, forms, power, and other supplies. This $200,000 is enough for 200,000 blood tests.

Required:

Assuming that the driver (measure of output) for each type of cost is the number of blood tests run, classify the costs by completing the following table. Put a check mark in the appropriate box for variable cost, discretionary fixed cost, or committed fixed cost.

Cost Category Variable Cost Discretionary Fixed Cost Committed Fixed Cost Technician salaries Laboratory facility Laboratory equipment Chemicals and other supplies Exercise