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Hyderabad Medical Hospital has outpatient clinics (HMH). Top administrator Yogesh Boob is par- ticularly concerned with cost reduction and has demanded that performance reports be prepared that compare anticipated and actual spending on medical assistants, clinic supplies, and laboratory testing.. Preliminary studies found that the cost of clinic supplies is dictated by the number of med- ical assistant hours worked, whereas the cost of lab tests is mostly driven by the number of patients serviced.d. The following information is available for June: Medical assistants - HMH's standard wage rate is $16 per hour, and each assistant is expected to spend 30 minutes with a patient. Assistants totaled 860 hours in helping the 1,640 patients seen, at an average pay rate of $17.50 per hour. Clinic supplies The cost of clinic supplies used is budgeted at $12 per labor hour, and the actual cost of supplies used was $9, 450. Lab tests - Each patient is anticipated to have three lab tests, at an average budgeted cost of $72 per test. Actual lab tests for June cost $368, 016 and averaged 3.3 per patient. Required: 1 Prepare a report that shows budgeted and actual costs for the 1,580 patients served during June. Compute the differences (variances) between these amounts and label them as favorable or unfavorable. 2 On the basis of your answer to requirement (1), determine whether HMH has any significant problems with respect to clinic supplies and lab tests. Briefly discuss your findings. 3 By performing a detailed analysis, determine the spending and efficiency variances for lab tests. Does it appear that HMH has any significant problems with the cost of its lab tests? Briefly explain. (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.) 4 Compare the lab test variance computed in requirement 1, a flexible-budget variance, with the sum of the variances in requirement 3. Discuss your findings and explain the relationship between flexible budget variances and standard cost variances for variable overhead. Hyderabad Medical Hospital has outpatient clinics (HMH). Top administrator Yogesh Boob is par- ticularly concerned with cost reduction and has demanded that performance reports be prepared that compare anticipated and actual spending on medical assistants, clinic supplies, and laboratory testing.. Preliminary studies found that the cost of clinic supplies is dictated by the number of med- ical assistant hours worked, whereas the cost of lab tests is mostly driven by the number of patients serviced.d. The following information is available for June: Medical assistants - HMH's standard wage rate is $16 per hour, and each assistant is expected to spend 30 minutes with a patient. Assistants totaled 860 hours in helping the 1,640 patients seen, at an average pay rate of $17.50 per hour. Clinic supplies The cost of clinic supplies used is budgeted at $12 per labor hour, and the actual cost of supplies used was $9, 450. Lab tests - Each patient is anticipated to have three lab tests, at an average budgeted cost of $72 per test. Actual lab tests for June cost $368, 016 and averaged 3.3 per patient. Required: 1 Prepare a report that shows budgeted and actual costs for the 1,580 patients served during June. Compute the differences (variances) between these amounts and label them as favorable or unfavorable. 2 On the basis of your answer to requirement (1), determine whether HMH has any significant problems with respect to clinic supplies and lab tests. Briefly discuss your findings. 3 By performing a detailed analysis, determine the spending and efficiency variances for lab tests. Does it appear that HMH has any significant problems with the cost of its lab tests? Briefly explain. (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.) 4 Compare the lab test variance computed in requirement 1, a flexible-budget variance, with the sum of the variances in requirement 3. Discuss your findings and explain the relationship between flexible budget variances and standard cost variances for variable overhead