Alva Community Hospital has five laboratory technicians responsible for doing a series of standard blood tests. Each

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Alva Community Hospital has five laboratory technicians responsible for doing a series of standard blood tests. Each technician is paid a salary of $30,000 and is capable of processing 4,000 tests per year. 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 5 years. Both facility and equipment are depreciated on a straight-line basis. In addition to the salaries, facility, and equipment, Alva expects to spend $200,000 for chemicals, forms, power, and other supplies (assuming 20,000 tests are processed). During the year, 16,000 blood tests were run.

Required:

1. Classify the resources associated with the blood-testing activity into one of the following: (1) committed resources, (2)- flexible resources.

2. Calculate the fixed activity rate and the variable activity rate for the blood- testing activity. What is the total cost of one blood test?

3. Compute the total activity availability and break this into activity usage and un- used activity.

4. Calculate the total cost of resources supplied and break this into the cost of ac- tivity used and the cost of unused activity.lop5

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Management Accounting

ISBN: 9780324002263

5th Edition

Authors: Don R Hansen, Maryanne M Mowen

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