3 Problem 10-12 Variance Analysis in a Hospital [LO10-1, LO10-2, LO10-3] John Fleming. chief administrator for Valley View Hospital, is concemed about the costs for tests in the hospital's lab. Charges for lab tests are consistently higher at Valley View than at other hospitals and have resulted in many complaints. Also, because of sarict regulations on amounts reimbursed for lab tests, payments r high enough to cover lab costs. 30 points 02mm) received from insurance companies and governmental units have not been Mt. Fleming has asked you to evaluate costs in the hospital's lab for the past month. The following information a Two types of tests are performed in the lab blood tests and smears, During the past month, 900 blood tests and 3,300 smears Print were performed in the lab References b. Small 2,300 of these plates were unused at the end of the month, no plates were on hand at the beginning of the month c During the past month, 2,300 hours of labor time were recorded in the lab at a cost of $25,185 d The lab's variable overhead cost last month totaled $18,170 Valey View Hospital has never used standard costs. By searching industry literature, however you have determined the following nationwide averages for hospital labs Plates Three plates are required per lab test. These plates cost $225 each and are disposed of after the test is completed Labor Each blood test should require 06 hours to complete, and each smear should requre 0 30 hours to complete. The average cost of this lab time is $11.50 per hour Overhead Overhead cost is based on direct labor-hours. The average rate for variable overhead is $740 per hour Required 1. Compute a materials price variance for the plates purchased last month and a materials quantity variance for the plates used last month 2. For labor cost in the lab a Comoute a labor rate variance and a labor efficiencv variance lelall are assistants, In an effort JUnC IOUIH senior technicians and three fourths assistants. Would you recommen De continued? 3-a. Compute the variable overhead rate and efficiency variances 3-b. Is there any relation between the variable overhead efficiency variance and the labor efficiency variance? 02:18:33 eBook Complete this question by entering your answers in the tabs below. Print Req 1 Req 2A Req 2B Req 3A Req 3B Is there any relation between the variable overhead efficiency variance and the labor efficiency variance? OYes No Req 3A Req 3B 3 of 3 Next KPrey Quantity or Standard Price St Direct materials Direct labor 7.3e pounds $2.25 per pound $16.43 e.65 hours $6.se per hour $ 4.22 30 points During the most recent month, the following activity was recorded 022058 a 16,60000 pounds of material were purchased at a cost of $2.05 per pound b. All of the material purchased was used to produce 2,000 units of Zoom c 1200 hours of direct labor time were recorded at a total labor cost of $11,400 Print Relferences Required: 1 Compute the materials price and quantity variances for the month 2 Compute the labor rate and efficiency variances for the month (For all requirements, Indicate the effect of each variance by selecting " for favorable, "U" for unfevorable, and "None" for no effect (ie., zero variance) Input all amounts as positive values. Round your intermediate calculations to the Materials price variance Materials quanity variance Labor rate variance Labor efficiency varianoe