The maternity wing of the city hospital has two types of patients: normal and cesarean. The standard quantities of labor and materials per delivery for 2009 are:

The standard price paid per pound of direct materials is $10. The standard rate for labor is $16. Overhead is applied on the basis of direct labor hours. The variable overhead rate for maternity is $30 per hour, and the fixed overhead rate is $40 per hour. Actual operating data for 2009 are as follows:
a. Patient days produced: normal, 3,500; cesarean, 7,000.
b. Direct materials purchased and used: 172,000 pounds at $9.50€”30,000 for normal maternity patients and 142,000 for the cesarean patients; no beginning or ending raw materials inventories.
c. Nursing labor: 36,500 hours€”7,200 hours for normal patients and 29,300 hours for the cesarean; total cost of labor, $580,350.

Required:
1. Prepare a standard cost sheet showing the unit cost per patient day for each type of patient.
2. Compute the materials price and usage variances for each type of patient.
3. Compute the labor rate and efficiency variances.
4. Assume that you know only the total direct materials used for both products and the total direct labor hours used for both products. Can you compute the total materials usage and labor efficiency variances?Explain.

Transcribed Image Text:

Normal Direct materials (bs.) Nursing labor (hrs.) Cesarean 20 4 2