Marc Goudreau, administrator of Clearwater Hospital, was puzzled by the prior month's reports. "Every month, it's anyone's guess whether the lab will show a profit or a loss. Pethaps the only answer is to increase our lab fees again." "We can't" replied Rhoda Groves, the controller. "There are still a lot of complaints about the last increase, particularly from the insurance companies and government health units. They'e now paying only about 80% of what we bill. I m beginning to think the problem is on the cost side: To determine if the Clearwater lab costs are in line with those of other hospital labs, Goudreau has asked you to evaluate the costs for the past month, Groves has provided you with the following information: a. Two basic types of tests are performed in the lab-smears and blood tests. During the past month, 2,700 smears and 1,200 blood tests were performed in the lab. b. Small glass plates are used in both types of tests. During the past month, the hospital purchased 12.000 plates at a cost of $20.952 This cost is net of a 3% purchase discount. A total of 1,200 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, 1,600 hours of labour time were used in performing smears and blood tests. The cost of this tabour time was $13,120.00 d. The lab's variable overhead cost last month totalled $5,200 e. Fixed overhead cost last month totalied $9,050 Clearwater Hospita! has never used standard costs. By searching industry literature, however you have determined the following nationwide averages for hospital labs: Platesi. Three plates are required per lab test. These plates cost 81,80 each and are disposed of after the test is conpleted. Labourt Each smear should require 0.3 hours to complete, and each blood test should require 0.6 hours to eonplete. The wverage cost of this lab time is $10 per hour, Overheadroverhead cost is based on direct labour-hours, The average rate of variable overhead is $3 per hour. The average rate of. fixed overhead is 56 per hour. These rates are based on a denominator activity level of 1 , seo hours per month. Required: 1. Compute the materials price variance for the plates purchased last month, and compute a materials quantity variance for the plates used last month. (Indicate the effect of each voriance by selecting "F" for favoroble, "U" for unfovorable, ond "None" for no effect (i.e., zero variance).) * Answer is complete but not entirely correct. 2-a. Compute a labour rate variance and a labour efficiency variance for the lab. (Indicote the effect of each voriance by selecting " F " for favorable, "U" for unfavorable, ond "None" for no effect (i.e., zero voriance). Do not round intermediote calculation and round your final answers to 1 decimal place.) Answer is complete but not entirely correct. 2.b. This part of the question is not part of your Connect assignment. 3-e. Compute the variable overhead spending and efficiency variances. (indicate the effect of each variance by selecting "F" for fovoroble, "U" for unfovorable, ond "None" for no effect (i.e, zero variance).) 3-b. This part of the question is not part of your Connect assignment. 4. Compute the fixed overhead budget and volume varlances. (Indicate the effect of each variance by selecting "F" for favorable "U" for unfovorable, and "None" for no effect (i.e., zero variance).) Marc Goudreau, administrator of Clearwater Hospital, was puzzled by the prior month's reports. "Every month, it's anyone's guess whether the lab will show a profit or a loss. Pethaps the only answer is to increase our lab fees again." "We can't" replied Rhoda Groves, the controller. "There are still a lot of complaints about the last increase, particularly from the insurance companies and government health units. They'e now paying only about 80% of what we bill. I m beginning to think the problem is on the cost side: To determine if the Clearwater lab costs are in line with those of other hospital labs, Goudreau has asked you to evaluate the costs for the past month, Groves has provided you with the following information: a. Two basic types of tests are performed in the lab-smears and blood tests. During the past month, 2,700 smears and 1,200 blood tests were performed in the lab. b. Small glass plates are used in both types of tests. During the past month, the hospital purchased 12.000 plates at a cost of $20.952 This cost is net of a 3% purchase discount. A total of 1,200 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, 1,600 hours of labour time were used in performing smears and blood tests. The cost of this tabour time was $13,120.00 d. The lab's variable overhead cost last month totalled $5,200 e. Fixed overhead cost last month totalied $9,050 Clearwater Hospita! has never used standard costs. By searching industry literature, however you have determined the following nationwide averages for hospital labs: Platesi. Three plates are required per lab test. These plates cost 81,80 each and are disposed of after the test is conpleted. Labourt Each smear should require 0.3 hours to complete, and each blood test should require 0.6 hours to eonplete. The wverage cost of this lab time is $10 per hour, Overheadroverhead cost is based on direct labour-hours, The average rate of variable overhead is $3 per hour. The average rate of. fixed overhead is 56 per hour. These rates are based on a denominator activity level of 1 , seo hours per month. Required: 1. Compute the materials price variance for the plates purchased last month, and compute a materials quantity variance for the plates used last month. (Indicate the effect of each voriance by selecting "F" for favoroble, "U" for unfovorable, ond "None" for no effect (i.e., zero variance).) * Answer is complete but not entirely correct. 2-a. Compute a labour rate variance and a labour efficiency variance for the lab. (Indicote the effect of each voriance by selecting " F " for favorable, "U" for unfavorable, ond "None" for no effect (i.e., zero voriance). Do not round intermediote calculation and round your final answers to 1 decimal place.) Answer is complete but not entirely correct. 2.b. This part of the question is not part of your Connect assignment. 3-e. Compute the variable overhead spending and efficiency variances. (indicate the effect of each variance by selecting "F" for fovoroble, "U" for unfovorable, ond "None" for no effect (i.e, zero variance).) 3-b. This part of the question is not part of your Connect assignment. 4. Compute the fixed overhead budget and volume varlances. (Indicate the effect of each variance by selecting "F" for favorable "U" for unfovorable, and "None" for no effect (i.e., zero variance).)