John Fleming. chlef administrator for Valley View Hospital, is concerned about the costs for tests in the hospitai'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 recelved 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 hospitar's lab for the past month. The following information is availablec a. Two types of tests are performed in the lab-blood tests and smears. During the past month. 350 blood tests and 2.300 smears were performed in the lab. b. Small glass plates are used in both types of tests. During the past month, the hospital purchased 11,500 plates at a cost of $27.025. 1,300 of these plates were unused at the end of the month: no plates were on hand at the beginning of the month. c. During the past month, 1,300 hours of labor time were recorded in the lab at a cost of $13,585. d. The lab's variable overhead cost last month totaled $8,970. Valley View Hospital has never used standard costs. By searching industry literature, however, you have determined the following nationwide averages for hospital labs: Piates: Three plates are required per lab test. These plates cost $2.50 each and are disposed of after the test is completed. Labor Each blood test should require 0.6 hours to complete, and each smear should require 0.30 hours to complete. The average cost of this lab time is $11.30 per hout. Overhead; Overhead cost is based on direct labor-hours. The average rate for variable overhead is $6.40 per hout. Required: 1. Compute a materlals price varlance for the plates purchased last month and a materlats quantify variance for the plates used last. 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-half are assistants. In an cifort to reduce costs. Valley View Hospital employs only one-fourth senior techinicions and three-fourths assistants. Would you recommend that this policy be continued? Overbead: Overhead cost is based on direct labor-hours. The average rate for varlable overhead is $6.40 per hout. Required: 1. Compute a materials price variance 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 labor efficiency variance. b. In most hospitals, one-half of the workers in the lab are senior technicians and one-holf are assistants. In an effort to reduce costs. Valley View Hospital employs only one-fourth senior technicians and thee-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 varlable overhead efficiency variance and the labor efficiency variance? Complete this question by entering your answers in the tabs below. Compute a materials price varlance for the plates purchosed last month and a materials quantity variance for the plates used lost month. (indicate the effect of each variance by selecting "F, for favorable, "U" for unlavornble, and "None" for no eeflect (fle, zero varlance), Input all arnounts as positive volues.) Overhead: Overhead cost is based on direct labor-hours. The average rate for varlable overhead is $6.40 per hour. Required: 1. Compute a materials price variance for the plates purchased last month and a materials quantily variance for the plates used last 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-half are assistants. In an effort to reduce costs, Valley View Hospital employs only one-fourth senior techniclans and three-fourths assistants. Would you recommend that this policy be continued? 3-a. Compute the variable overhead rate and efficiency varlances. 3b. 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. 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, ond "Noin" for no effect (i.e.ver. zero vardance). Input all amounts as positive values.) Overhead: Overhead cost is based on direct labor-hours. The average rate for variable overhead is $6.40 per hour. Required: 1. Compute a materials price variance for the plates purchased last month and a materials quantify variance for the plates used last month. 2. For labor cost in the lab: a. Compute a labor rate varlance 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? 3.a. Compute the variable overhead rate and efficiency variances. 3.b. Is there any relation between the variable overthead efficiency variance and the labor efficiency variance? Complete this question by entering your answers in the tabs below. In most hospitals, one-half of the workers in the lab are senior techinicians 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 recoinmend that this policy be continued? Overhead: Overhead cost is based on direct labor-hours. The average rate for variable ovethead is $6.40 per hour. Required: 1. Compute a materials price variance for the plates purchased last month and a materlals quantity variance for the plates used last month. 2. For labor cost in the lab: a. Compute a labor rate variance and a labor efficiency varlance. b. In most hospitals, one half of the workers in the lab are senior techniclans 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 varlances. 3-b. Is there any relation between the varlable overhead efficiency variance and the labor efficiency variance? Complete this question by entering your answers in the tabs below. Compute the variable overhead rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favorable, "U for unfavorable, and "None" for no offect (i.e., zero variance). Ingut ail amounts as positive values.) Overhead: Overhead cost is based on direct labor hours. The average fate for varlable overhead is $6.40 per hour. Required: 1. Compute a materials price variance for the plates purchased lost month and a materials quantify variance for the plates used last 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 half are assistaints. 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? Complete this question by entering your answers in the tabs below. Is there any relation between the variable overhead efficiency yariance and the labor efficiency variance