Cost Category Variable Discretionary Fixed Cost Committed Fixed Cost Cost Technician salaries Laboratory facility Laboratory equipment Chemicals and other supplies
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 5 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 an X in the appropriate box for
variable cost, discretionary fixed cost, or committed fixed cost.
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