Lab Management Practice Question

A laboratory takes on extra specimens sent in from a large private suburban medical practice. In order to do so, the lab needs to spend more money in order to integrate the extra work. Of the following costs, which of the following best represents a step variable cost?

Show Answer and Explanations

A supervisor salary — Correct answer

Correct. A step variable cost varies with the work level, but is incurred at discrete points. This type of cost varies with volume, but not in direct proportion. Examples can include a technologist's salary or a supervisor's salary. For the tech salary, increased labor can be performed by the currently employed techs, but past a point, a new tech will need to be hired. For the supervisor's salary, a set of supervisors can oversee the addition of so many techs, until a point at which a new supervisor will need to be hired. A step-variable cost is also known as a semi-variable cost and a semi-fixed cost.

Insurance policy on the equipment

Incorrect. The insurance premium is unlikely to increase from extra work, this is likely a fixed cost.

Reagents

Incorrect. The more work that is done the more reagents are needed - reagents are a variable cost.

Rent for the building

Incorrect. The rent should not go up if the work increases in the building - the rent is a fixed cost.

Shipping the medical waste from the facility.

Incorrect. This would increase in direct proportion to the work, and should be a variable cost.

Summary