Valley View Hospital has an outpatient clinic. Jeffrey Harper, the hospitals chief administrator, is very concerned about cost control and has asked that performance reports be prepared that compare budgeted and actual amounts for medical assistants, clinic supplies, and lab tests. Past financial studies have shown that the cost of clinic supplies used is driven by the number of medical assistant labor hours worked, whereas lab tests are highly correlated with the number of patients served. The following information is available for June:

Lab tests: Actual lab tests for June cost $446,555 and averaged 4.3 per patient. Each patient is anticipated to have four lab tests, at an average budgeted cost of $70 per test.

Medical assistants: Valley Views standard wage rate is $14 per hour, and each assistant is expected to spend 36 minutes with a patient. Assistants totaled 900 hours in helping the 1,550 patients seen, at an average pay rate of $15.70 per hour.

Clinic supplies: The cost of clinic supplies used is budgeted at $10 per labor hour, and the actual cost of supplies used was $9,000.

Required: 1. Prepare a report that shows budgeted and actual costs for the 1,550 patients served during June. Compute the differences (variances) between these amounts and label them as favorable or unfavorable. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Do not round intermediate calculations.)

	Budget:	Actual:
	1,550 patients	1,550 patients	Variance
Medical assistants
Clinic supplies
Lab tests
Total

3-a.

Determine the spending and efficiency variances for lab tests. (Hint: In applying the overhead variance formulas, think of the number of tests as the activity level, and think of the cost per test as analogous to the variable overhead rate.) (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Do not round intermediate calculations.)

variable overhead spending variance	?????	?????
variable overhead efficiency variance	?????	?????