Homework 6 John Fleming, chef administrator for Valley View Hospital is concerned about the costs forests in the host Charges for tests are consistently higher at Valley View that other hospitals and have rested in many cols. Also, because of regulations on amounts reimbursed for lab tests, payments received from suce companies and governot been Ngh enough to cover lab costs Mr. Fleming has asked you to evaluate costs in the hospital's tale for the past month. The following information is able 07 points a. Two types of tests are performed in the lab-blood tests and smears. During the past month. 650 blood tests and 2.800 wars were performed in the lab b. Small glass plates are used in both types of tests. During the past month, the hospital purchased 14.000 plates at a cost of $40,880 1.800 of these plates were unused at the end of the month o plates were on hand at the beginning of the month c. During the past month, 1800 hours of labor time were recorded in the lab at a cost of $19.260 d. The tab's variable overhead cost last month totaled $13,320 rences Valley View Hospital has never used standard costs. By searching industry iterature, however you have determined the following nationwide averages for hospital labs Plates. Three plates are required per lab test. These plates cost $3.00 each and are disposed of after the test is completed Labor. Each blood test should require 08 hours to complete, and each year should require 0.40 hours to complete. The average cost of this lab time is $1100 per hour Overhead Overhead cost is based on direct labor hours. The average rate for variable overhead is $6.90 per how Required: 1 Compute a materials price variance for the plates purchased last month and a materials quantity variance for the planes used ist month 2. 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 hat are asustants 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? points uce costs Assistants. Would you recommend that this policy 3-a. Compute the variable overhead rate and efficiency varionces. 3-b. Is there any relation between the variable overhead efficiency variance and the labor efficiency variance? floor Complete this question by entering your answers in the tabs below. References Reg 1 Reg 2A Reg 28 Red 3A Reg 38 Compute a materials price variance for the plates purchased last month and a materiais quantity variance for the plates used last month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None for no effect (le, zero variance). Input all amounts as positive values.) Materials price variance Materials quantity variance Heg 2 > Tole 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 poicy be continued? 07 points 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? ook Complete this question by entering your answers in the tabs below. References Reg 1 Reg 2A Reg 28 Reg JA Reg38 For labor cost in the lab, Compute a labor rate variance and a labor efficiency variance. (Indicate the effect of toch variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (1.7ero variance). Input all amounts as positive values.) Labor role variance Labor efficiency variance points echnicians 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? eBook Complete this question by entering your answers in the tabs below. References Reg 1 Req 2A Reg 26 Reg 3 Reg 38 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? Yes No Reg) 07 points month 10 des quantity variance for the plates used in 2. 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? Book 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? References Complete this question by entering your answers in the tabs below Reg 1 Reg 2A Req 28 Req3 Reg38 Is there any relation between the variable overhead efficiency variance and the labor efficiency variance Yes No