16) MC Qu. 270 Longview Hospital performs ...

Longview Hospital performs blood tests in its laboratory. The following standards have been set for each blood test performed:

	Standard Quantity or Hours	Standard Price or Rate
Direct materials	2.0 plates	$2.75 per plate
Direct labor	0.2 hours	$15.00 per hour
Variable overhead	0.2 hours	$7.00 per hour

During May, the laboratory performed 1,500 blood tests. On May 1 there were no direct materials (plates) on hand; after a plate is used for a blood test it is discarded. Variable overhead is assigned to blood tests on the basis of standard direct labor-hours. The following events occurred during May: 3,600 plates were purchased for $9,540 3,200 plates were used for blood tests 340 actual direct labor-hours were worked at a cost of $5,550 The direct materials purchases variance is computed when the materials are purchased. The labor rate variance for May is:

A) $450 U

b) $450 F

c) $225 U

D) $225 F