The director of a large regional reference laboratory was reviewing its performance over the past year. The laboratory had gross revenues of $3,500,000.
Some of the business was to managed care plans and to large-volume users that resulted in a discount of $350,000, which was $25,000 more than
anticipated due to intense competition. The cost of providing the lab testing was $1,400,500, which was $250,000 higher than expected. Direct costs for
salaries were $870,000.
Address each of the following in your paper:
What was the product mix variance experienced by the laboratory service? Explain your answer.
What was the price variance? Explain your answer.
Your paper should be 1–2 pages and follow APA guidelines.