In the article titled "Red Cross Raises Prices," reference is made to several types of costs involved in operating the Red Cross, including "implementing blood safety measures," "collecting, testing, transporting, and delivering blood," "research and development," and an "advertising and telephone campaign."If the "product" of the Red Cross is providing "pints of blood," then which of these costs would you classify as fixed costs and which would you classify as variable costs?Explain your reasoning.
Red Cross Raises Prices 2001 JUN 21 - (NewsRx.com & said, "There are still critical Prices are expected to remain NewsRx.net) U.S. hospitals will blood shortages in this country." stable for other blood products, pay more for blood collected by The extra funds will be used such as platelets used for the American Red Cross, which to help pay off roughly $300 cancer patients and plasma plans to raise its prices by July million in debt the organization used to treat hemophiliacs and 2001 to help pay off debts. has accrued in implementing others with bleeding disorders Red Cross officials said on blood safety measures, blood or immune system deficiencies. May 23, 2001, that they could officials said. The organization has started not say how much the price Since 1996, the cost of the a $2 million advertising and would increase nationally. Red Cross collecting, testing telephone campaign aimed at "Safety and availability is our transporting, and delivering current and lapsed donors. The number one priority," said blood has risen 27%. In that Red Cross recently tightened Jacquelyn Fredrick, who same time, officials said, prices restrictions on donors who have oversees collections and for their products have risen traveled to Europe to guard distribution for the Red Cross. 9.9%. against the import and spread of "We want to be able to ensure The Red Cross has an Creutzfeldt-Jacob disease, a tomorrow's blood supply by annual operating budget of human form of bovine investing in today's." roughly $1.7 billion. Officials spongiform encephalopathy The Red Cross, which said they need more money for commonly called mad cow supplies about half of the nation' research and development and disease. donor supply, is telling hospitals to create a strategic blood of its plans to raise the cost of a reserve for emergencies This article was prepared by Blood pint of blood. National officials The Red Cross has an Weekly editors from staff and other say the prices are being annual operating budget of reports. @ Copyright 2001, Blood determined by local blood roughly $1.7 billion. Official said Weekly via NewsRx. Copyright of centers. Indiana hospitals, for they need more money for Blood Weekly is the property of CW example, have already learned research and development and Henderson and its content may not their costs are rising 10% to be copied or emailed to multiple to create a strategic blood 35%. The typical pint of red sites or posted to a listserv without reserve for emergencies blood cell product now costs the copyright holder's express The Red Cross collects 6.5 written permission. However, users $130 to $150 million units of blood a year. The may print, download, or email Fredrick does not expect the organization collects a half articles for individual use. Source: price increase to affect hospitals' million units of other special Blood Weekly, 6/21/2001, p 9, 2 ability to provide blood to donations which may include patients this summer, but she plasma and platelets
