a$.$ Two types of tests are performed in the lab$-$blood tests and smears. During the past month, $1,350$ blood tests and $4,100$ smears

were performed in the lab.

b$.$ Small glass plates are used in both types of tests. During the past month, the hospital purchased $20,500$ plates at a cost of

$$59,040\mathrm{.}3,100$ 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, $3,100$ hours of labor time were recorded in the lab at a cost of $$35,185.$

d$.$ The lab's variable overhead cost last month totaled $$26,970.$

Valley 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 $$3\mathrm{.}00$ each and are disposed of after the test is completed.

Labor: Each blood test should require $0\mathrm{.}8$ hours to complete, and each smear should require $0\mathrm{.}40$ hours to complete. The average

cost of this lab time is $$12\mathrm{.}30$ per hour.

Overhead: Overhead cost is based on direct labor$-$hours. The average rate for variable overhead is $$8\mathrm{.}20$ per hour.

Required:

Compute a materials price variance for the plates purchased last month and a materials quantity variance for the plates used last

month.

For labor cost in the lab:

a$.$ Compute a labor rate variance and a labor efficiency variance.

b$.$ In most hospitals, one$-$half of the workers in the lab are senior technicians and one$-$half are assistants. In an effort to reduce costs,

Valley View Hospital employs only one$-$fourth senior technicians and three$-$fourths assistants. Would you recommend that this policy

be 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?