Orangeville Community Hospital (OCH) has five laboratory technicians who are responsible for doing a series of standard

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Orangeville Community Hospital (OCH) has five laboratory technicians who are responsible for doing a series of standard blood tests. Each technician is paid a salary of $47,000. The lab facility represents a recent addition to the hospital and cost $450,000. It is expected to last 20 years. Equipment used for the testing cost $36,000 and has a life expectancy of five years. In addition to the salaries, facility, and equipment, OCH expects to spend $350,000 for chemicals, forms, power, and other supplies. This $350,000 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.
Variable Discretionary Fixed Committed Fixed Cost Category Technician salaries Laboratory facility Laboratory equipment
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Cornerstones of Managerial Accounting

ISBN: 978-0176530884

2nd Canadian edition

Authors: Maryanne M. Mowen, Don Hanson, Dan L. Heitger, David McConomy, Jeffrey Pittman

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