cost and management course

Problem 10-32 Comprehensive Variance Analysis in a Hospital [LO2, LO3, LO4, LO5, LOG] Marc Goudreau, administrator of Clearwater Hospital, was puzzed by the prioc noonth' reports. "Every month its anyone's guess Wheller the lab will show a profit or a loss. Pertups the onV answer is to increase our lab fees again. "We-cant" replied Rhoda Groves, the controller. "There are still a lot of complaints absat the last increase, particularly from the rimurance companles and govertment health units. They're now paying only aboun 83% of what we bifl rim begining to think the problent is on the cont side" To tefermine if the Clearwatei lab costs are in line with those of other hospitat labs, Goudieau hat asked you to evaluate the costs for the past twanth. Growes has provided you with the following inforenationt a. Two biasic types of tests are performed in the lab-smears and blood testh. Duing the past month, 2.400 smears and 660 biood tests were performed in the lab. b. Simail glass plates are used in both types of tests. During the past month, the hospital purchased 26,000 plites it a cost of 562.400. Thes cost is net of a 4% purchase discount. A totat of 1000 of these plates were unused at the end of the monith no plates were on tand at the beginning of the month. C. Duting the past month, 1400 hours of labour time wese used la performing smears and blood tests. The coat of this laboir time was $1470000 d. The lab's variable overtead cost inst month totalles $6,145. e. fixed overthend cost last month totalled $9,000 nationwide werayes for hospitaillate? Ciearwater Hospital has never used standard costs. fy searching indistry literature, however, you have determined line foliowind thatiormide averages for hosplal labs: kout of this lah tile is $12 pen heure Required: 1. Compute the materiahs price vartance for the plates purchased last month, and compute ai moterials cuastily yartance for the plates tisted Iint month. (Indicate the effect of each variance by belecting "F" for favorable, "U" for unfavorable, and "None" for ro effect (l.e. zero variance).) 2-a. Compute a labour rate varlance and a labour efficiency varlance for the fab. (lindicate the effect of ench varionce by terie iting "F for favorable, "U" for unfavorable, and "None". for no effect (i.e. zero variance). Do not round intermediate colculation and rourted your final answers to 1 decimal place.) 3-b. Compute the variable overtiead spending and elliciency vactances, (Indicate the effect of each variance by selecting "Fil for favorable, "Un for unfovorable, and "None" for no effect (i.e, zero variance).) 3.b. This part of the question is not part of your Connect assignment. 4. Conmpute the fised overhead budget and volume variances. (indicate the effect of eoch variance by selecting "Fo for favorable. "U" for unfavoroble, and "None" for no effect (l.e-, zero variance))