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 strict regulations on amounts reimbursed for lab tests, payments received from insurance companies and governmental units have not been high enough to cover lab costs Mr. Fleming has asked you to evaluate costs in the hospitals lab for the past month. The following information is available a. Two types of tests are performed in the lab-blood tests and smears. During the past month, 200 blood tests and 2.000 smears were performed in the lab. b. Small glass plates are used in both types of tests. During the past month, the hospital purchased 10.000 plates at a cost of $32.900 1000 of these plates were unused at the end of the month, no plates were on band at the beginning of the month c. During the past month, 1000 hours of labor time were recorded in the lab at a cost of $10,300 d. The tab's variable overhead cost last month totaled $6,600. 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 $350 each and are disposed of atter the test is completed Labor Each blood test should require 06 hours to complete, and each smear should require o 30 hours to complete. The average cost of this tab time is 51100 per hour Overhead Overhead cost is based on direct tabor hours. The average rate for variable overhead is $6.10 per hour Required: 1 compute a materats price vanance 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. Compute a labor rate variance and a tabor efficiency variance b. In most hospitals, one half of the workers in the lab ate 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 Ja. Compute the variable overhead rate and efficiency variances 3.6. Is there any relation between the variable overhead efficiency variance and the labor efficiency variance? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Req 2B Req Reg 3B Compute a materials price variance for the plates purchased last month and a materials 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 (1... zero variance), Input all amounts as positive values.) Materials price variance Materials quantity variance Req2A > Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 28 Req 3A Reg 38 For labor cost in the lab, Compute a labor rate variance and a labor efficiency variance. (Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "Mone" for no effect (1. o., zero variance). Input all amounits as positive values.) Labor rate variance Labor efficiency variance Complete this question by antering your answers in the tabs below. Reg 1 Reg 2A Reg 2B Reg 3A 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? Oros ONO Complete this question by entering your answers in the tabs below. Reg! Reg 2A Reg 28 Reg 3 Req 3B Compute the variable overhead rate and efficiency variances. (Indicate the effect of each variance by selecting "" for favorable. "U" for unfavorable, and "None" for ho effect (.e., zero variance), Input all amounts as positive values.) Variable overhead rate variance Variable overhead efficiency variance Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 28 Reg 3A Reg 3B Is there any relation between the variable overhead efficiency variance and the labor efficiency variance? Yes ONO