John Fleming, chlef administrator for a district hospltal. Is concerned about costs for tests in the hospitais lab. Fleming has asked you to cvaluate costs for the past month. The following information is avallable: a. Basicaly, two types of tests are performed in the lab-biood tests and smears. During the past month, 2,340 blood tests and 3,120 smears were performed in the lab. b. Small glas5 plates are used in both types of tests. During the past month. the hospltal purchased 15.600 plates at a cost of $35.100. This cost is net of a 6% quantity discount 1,560 of these plates were still on hand unused at the end of the month; there were no plates on hand at the beginning of the manth. c. During the past month, 1,450 hours of labour time were recorded in the lab. The cost of this labour time was $17,400. d. Variable overhead cost last month in the lab for utilities and supplies totalled $9,425. The hosplal has never used standard costs. By searching lndustry therature, however, you have determined the following nationwide averages for hospital labs: plotes: Twn plates are required per lab test. These plates cost 37 . 05 esch wh are disposed af after the test is coepleted cabour: cach blood test should require 9.30 hour to coeplete, and each seear should require a, 15 hour to conplete. The sverage cost of this tsb ties is \$14, 9 per hour. overhad: Overhad cost is based on direct labour-hours. The averale rate for variable overtiead is $5.59 per mour. Fleming would like a complete analysis of the cost of plates, labour, and overhead in the lab for the last month so that he can get to the root of the lab's cost problem. Required: 1. 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 favourable, "U" for unfavourable, and "None" for no effect (i.e., zero voriance).) 2. For labour cost in the lab: 6. Compute a labour rate variance and a labour efficiency variance. (Do not round intenmediate calculations. Round "Efficiency variance" onswer to 2 decimel places. Indicate the effect of each variance lay selecting "F" for favourable, "U" for unfaveurable, and "None" for no effect (i.e., zero variance).] b. This part of the question is not part of your Connect assipnment 3-a. Compute the variable overhead spending and efficiency varlances. (Do not round intermediete calculations, Round "Efficiency variance" answer to 2 decimal places. Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance.).) 3-b. Is there any relationship between the variable cverhead efficiency variance and the labour efficiency variance
