AMPLES AND EXERCISES, SUPPLEMENTAL MATERIALS, AND SOLUTIONS Assignment Exercise 18-1: Variance Analysis Greenview Hospital operated at 120% of normal capacity in two of its departments dur year. It operated 120% times 20,000 normal capacity direct labor nursing hours in routine and it operated 120% times 20,000 normal capacity equipment hours in the labor vices at The lab allocates overhead by measuring minutes and hours the equipment is used; thus equip. ment hours Assumptions For Routine Services Nursing: 20,000 hours 120% 24,000 direct labor nursing hours Budgeted Overhead at 24,000 hours $42,000 fixed plus $6,000 variable $48,000 to . Actual Overhead at 24,000 hours $42,000 fixed plus $7,000 variable $49,000 total . Applied Overhead for 24,000 hours at $2.35 $56,400 For Laboratory 20,000 hours 120% = 24,000 equipment hours e Budgeted Overhead at 24,000 hours $59,600 fixed plus $11,400 variable $71,000 total. Actual Overhead at 24,000 hours = $59,600 fixed plus $11,600 variable-$71,200 total o Applied Overhead for 24,000 hours at $3.455 $82,920 equired 1. Set up a worksheet for applied overhead costs and volume variance with a column for Routine Services Nursing and a second column for Laboratory. 2. Set up a worksheet for actual overhead costs and budget variance with a column for Rou- tine Services Nursing and a second column for Laboratory. 3. Set up a worksheet for volume variance and budget variance totaling net variance with column for Routine Services Nursing and a second column for Laboratory. 4. Insert input data from the Assumptions 5. Complete computations for all three worksheets