American Red Cross is a non-profit organization that distributes relief aid to affected communities and individuals. Moreover, the organization provides shelter, health care services, and water to the victims of a disaster. The organization reconnects families and offers sanitation services during and after a disaster. American Red Cross is responsible for implementing disaster preparedness programs, thus enhancing community resilience. When these communities learn to cope and deal with disaster independently, they will not rely on external relief aid (Paul 47). Sometimes, blood donation is mobilized, and I volunteer with my friends to assist during the event by escorting people and serving refreshments. Additionally, my family has made it a routine to make donations to the organization to give back to the community.
The main cost driver for American Red Cross is the frequency of disaster occurrence. Since the organization feeds, shelters, and comforts victims of a disaster, if more disasters are happening in different regions, it will incur more costs. These costs will come in terms of food supplies, water, health care services, and sanitation provided to the disaster victims. Moreover, the organization will need to set up more shelter facilities which will need an additional budget (Taschner and Charifzadeh 93). Another cost driver is the number of machine-hours determined by the number of disasters. The organization’s vehicles travel more to disaster regions to deliver relief aid. They consume more fuel, thus increasing the organization’s overall cost.
American Red Cross has a diagnostic manufacturing division for developing diagnostic reagents for laboratories and hospitals. These reagents are used to test patient and donor blood to ensure safety. The unit-level activities associated with providing the organization’s services are the direct materials costs and machine maintenance (Hansen and Mowen 78). Nevertheless, product-level activities can be found in the manufacturing division and will include the cost of designing and packaging the reagents. Batch level activities refer to the expenses sustained from producing several units together. The organization prepares purchase orders for raw materials and some finished products. Moreover, quality tests are performed to ensure safety of products. Hence, purchase orders and quality tests are examples of batch level activities. Additionally, the organization’s sustaining level activities have been cleaning, security, and management.
Works Cited
Hansen, Don R., and Maryanne M. Mowen. Cornerstones of Cost Management. Cengage Learning, 2017.
Paul, Bimal K. Natural Hazards and Disasters: From Avalanches and Climate Change to Water Spouts and Wildfires [2 volumes]. ABC-CLIO, 2020.
Taschner, Andreas, and Michel Charifzadeh. Management Accounting in Supply Chains. Springer Nature, 2020.