City Hospital has an outpatient clinic. The chief administrator is very concerned about cost control and has asked that performance reports be prepared for June that compare budget to actual amounts for lab tests. Each patient is anticipated to have three lab tests, at an average budgeted cost of $ per test. The clinic budgeted  patients for June. Actual lab tests for June cost $ and averaged  per patient. 

 

Required:

a Calculate the variances due to volume and to cost control for lab tests for June. Make sure to let the administrator know whether each variance was favorable or unfavorable