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please answer all required parts of the question John Fleming, chief administrator for a district hospital, Is concerned about costs for tests in the hospital's
please answer all required parts of the question
John Fleming, chief administrator for a district hospital, Is concerned about costs for tests in the hospital's lab. Fleming has asked you to evaluate costs for the past month. The following information is available: a. Basically, two types of tests are performed in the lab-blood tests and smears. Duning the past month, 1,890 blood tests and 2,520 smears were performed in the lab. b. Small glass plates are used in both types of tests. During the past month, the hospital purchased 12,600 plates at a cost of $25,200. This cost is net of a 6% quantity discount. 1.260 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. c. During the past month, 1,200 hours of labour time were recorded in the lab. The cost of this labour time was $14,100. d. Variable overhead cost last month in the lab for utuities and supplies totalled $7,440. The hospital has never used standard costs. By searching industry literature, however, you have determined the following nationwide averages for hospital labs: plotes: Tro plates are required per 20b test. These plates cost 52.15 each and are disposed of after the test is completed. Labour: Each blood test should require 0.30 hour to conplete, and each smear should require 0.15 hour to complete. The average cost of this 106 tine is $14,60 pen hour. overnead: Overhead cost is bosed on direct 1abouc-hours. The average rate for variable overhead is s5. 00 per hour. Fleming would like a complete analysis of the cost of plates, tabour, and overnead in the lab for the last month so that he can get to the root of the lab's cost probiem Requlred: 1. Compute a materiais price vanance for the plates purchased last month and a materlals quantity variance for the plates used last month. (indicate the effect of each varlance by selecting "F" for favourable, "U" for unfovourable, and "None" for no effect (l.e.. zero vorlance). 2. For labour cost in the lab a. Compute a labour rate vanance and a labour efficlency vanance. (Do not round Intermediate calculations. Round "Efnclency varlance" answer to 2 declmal ploces. Indicate the effect of each varlance by selecting "F" for favourable, "U" for unfovourable; ond "None" for no effect (l.e., zero variance).) b. This part of the question is not part of your Connect assignment 3-0. Compute the variable overhead spending and emficiency variances: (Do not round Intermedlote caiculotions, Round "Emielency vorisnce" answer to 2 decimal places. Indicate the effect of esch variance by selecting "F" for favourable, "U" for unfavourable. ond "None" for no effect (1.e., zero voriance.).) Step by Step Solution
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