John Fleming, chief administrator for Valley View Hospital, is concerned obout the costs for tests in the hospital's lab Charges for lab tests are consistently higher at valley Vlew than at other hospitals and have resulted in many complaints. Also, because of strict regulations on amounts reimbursed for lab tests, poyments received from insurance componies and governmental units have not been high enough to cover lab costs Mr. Fieming has asked you to evaluate costs in the hospital's lab for the post 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 1,000 or these plotes were unused at the end of the month, no plates were on hand at the beginning of the month c. During the past month, 1,000 hours of laboe time were recorded in the lab at a cost of $10.300 d. The lab's variable overhead cost last month totaled \$6,600 Valiey View Hospital has never used standard costs By searching industry literoture, however, you have determined the following nationwide averages for hospital iabs Piates. Three plates are required per lab test These plates cost $350 each and are disposed of after the test is completed Labor Each blood test should require 06 hours to complete, and each smear should require 0.30 hours to complete The average cost of this lab time is $11.00 per hour. Overhead Overhead cost is based on direct laborahours. The average rate for variable overhead is $610 per hour Required: 1 Compute a materiais price varience for the plates purchased last month and a materials quantity variance for the plates used last month 2. For iabor 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, Volley View Hospital employs only one-fourth senior technicians and three-fourths assistants Would yourecommend that this policy be continued? 3.- Compute the variable overhead rate and efficiency variances. 3-b. is there any relation between the variable overhead efficiency variance and the labor etficiency variance