CTIVE 1 Problem 10-66 Unit Costs, Multiple Products, Variance Analysis, Service Setting The maternity wing of the city hospital has two types of patients: normal and cesarean. The standard quantities of labor and materials per delivery for 20XI are: Normal 9.0 2.5 Cesarean 21.0 5.0 EXCEL Direct materials (Ibs) Nursing labor (hrs) The standard price paid per pound of direct materials is $10.00. The standard rate for labor is 16.00. Overhead is applied on the basis of direct labor hours. The variable overhead rate for maternity is $30.00 per hour, and the fixed overhead rate is $40.00 per hour Actual operating data for 20XI are as follows a. Deliveries produced: normal, 4,000; cesarean, 8,000 b. Direct materials purchased and used: 200,000 pounds at $9.50-35,000 for normal maternity patients and 165,000 for the cesarean patients; no beginning or ending raw materials inventories Nursing labor: 50,700 hours-10,200 hours for normal patients and 40,500 hours for the cesarean; total cost of labor, $580,350. Required: 1. Prepare a standard cost sheet showing the unit cost per delivery for cach type of paticnt 2. Compute the materials price and usage variances for each type of patient. 3. Compute the labor rate and efficiency variances for each type of patient. CONCEPTUAL CONNECTION Assume that you know only the total direct materials used for both products and the total direct labor hours used for both products. Can you compute the total materials usage and labor efficiency variances? Explain. CONCEPTUAL CONNECTION Standard costing concepts have been applied in the healthcare industry. For example, diagnostic-related groups (DRGs) are used for prospective payments for Medicare patients. Select a search engine (such as Yahoo! or Google), and conduct a search to see what information you can obtain about DRGs. You ew Insert Format Tools Data Window Help P10-66 in-class(1) Home Insert Draw Page Layout Formulas Data Review View X Arial Conditional Formatting v 10 -Number Paste Cell Styles v M N AL AC Valable ovetead Ceseean delvery 12 13 Fxed overheed 18 93 LRV Noma 4Sheett+ 0 10-56 in-class(1) Insert Draw Page Layout Formulas Data Review View 22 v VKA" 00 v Conditional Formatting v Aria 10, Format as Table Cell Styles Number F GH LW MW 0 SP MPV Normal) $305.00 . MPV (Cesarean) $640.00 AQ 10 SO SP MUV MUN (Nomal MN Cesarean) 30,000 3. LRV (Normal 410.00 LRV (Cesarean) 8H LEV LEV (Nomal) LEV (Cesarean) 4. Please descrbe in your own words (one or two sentenoes) possible explanations for the varances lsted below MPV (Cesarean) LEV (Cesarean) Sheet1+ Ready CTIVE 1 Problem 10-66 Unit Costs, Multiple Products, Variance Analysis, Service Setting The maternity wing of the city hospital has two types of patients: normal and cesarean. The standard quantities of labor and materials per delivery for 20XI are: Normal 9.0 2.5 Cesarean 21.0 5.0 EXCEL Direct materials (Ibs) Nursing labor (hrs) The standard price paid per pound of direct materials is $10.00. The standard rate for labor is 16.00. Overhead is applied on the basis of direct labor hours. The variable overhead rate for maternity is $30.00 per hour, and the fixed overhead rate is $40.00 per hour Actual operating data for 20XI are as follows a. Deliveries produced: normal, 4,000; cesarean, 8,000 b. Direct materials purchased and used: 200,000 pounds at $9.50-35,000 for normal maternity patients and 165,000 for the cesarean patients; no beginning or ending raw materials inventories Nursing labor: 50,700 hours-10,200 hours for normal patients and 40,500 hours for the cesarean; total cost of labor, $580,350. Required: 1. Prepare a standard cost sheet showing the unit cost per delivery for cach type of paticnt 2. Compute the materials price and usage variances for each type of patient. 3. Compute the labor rate and efficiency variances for each type of patient. CONCEPTUAL CONNECTION Assume that you know only the total direct materials used for both products and the total direct labor hours used for both products. Can you compute the total materials usage and labor efficiency variances? Explain. CONCEPTUAL CONNECTION Standard costing concepts have been applied in the healthcare industry. For example, diagnostic-related groups (DRGs) are used for prospective payments for Medicare patients. Select a search engine (such as Yahoo! or Google), and conduct a search to see what information you can obtain about DRGs. You ew Insert Format Tools Data Window Help P10-66 in-class(1) Home Insert Draw Page Layout Formulas Data Review View X Arial Conditional Formatting v 10 -Number Paste Cell Styles v M N AL AC Valable ovetead Ceseean delvery 12 13 Fxed overheed 18 93 LRV Noma 4Sheett+ 0 10-56 in-class(1) Insert Draw Page Layout Formulas Data Review View 22 v VKA" 00 v Conditional Formatting v Aria 10, Format as Table Cell Styles Number F GH LW MW 0 SP MPV Normal) $305.00 . MPV (Cesarean) $640.00 AQ 10 SO SP MUV MUN (Nomal MN Cesarean) 30,000 3. LRV (Normal 410.00 LRV (Cesarean) 8H LEV LEV (Nomal) LEV (Cesarean) 4. Please descrbe in your own words (one or two sentenoes) possible explanations for the varances lsted below MPV (Cesarean) LEV (Cesarean) Sheet1+ Ready