Management accounting

2. Small glass plates are used in both types of tests. During last month, the hospital purchased 12,000 plates at a total cost of t28,200. 1,500 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 month. 3. During last month, 1,150 hours of labour time were recorded in the laboratory. The cost of this labour time was f13,800. 4. In most hospitals, one-half of the workers in the laboratory are senior technicians and one-half are assistants. In an effort to reduce costs, Grafton Hospital employs only onequarter senior technicians and three-quarters assistants. 5. Variable overhead costs last month in the laboratory totaled E7,820. Grafton Hospital has never used standard costs. By searching industry literature, however, you have determined the following nationwide averages for hospital laboratories. Plates: Two plates are required per laboratory test. These plates should cost $2.50 each and are disposed of after the test is completed. Labour: Each blood test should require 0.3 hours to complete, and each urine test should require 0.15 hours to complete. The average cost of this laboratory time is f14 per hour. Overhead: Overhead cost is based on direct labour-hours. The average rate for variable overhead is f6 per hour. Required: (a) Using the information provided, prepare standard costs for each of the two types of tests provided by the laboratory and calculate all possible variances for last month. (12 marks)