John Feming, chief administrator for Valley View Hosptal is concch tests are conslatently higher at Valley Vlew then at other hospitels anc Ut the costs for tests in the hospltal's lab. Charges fo reguations on amounts relmburspd for lab tests, peymerils recened frof resulied in many compiaints. Also, because of strict high enough to cover lab coats. surance componles and governmerial units have no

Mc$.$ Foming has asked you to exaluale costs in the haspltal's lab for the poat manth. The following information is available:

a$.$ Two types of terts are peformed in the lab$-$blood tests and smears. During the past month, $400$ blood tests and $2\mathrm{.}400$ smedr were pertarmed in the lab

b$.$ Small glass plates are used in both types of tests. During the past month, the hosplital purchased $12,000$ plates at a cost of $$371400$ of these plates were unused at the end af the morth; no pla:es were an hand at the beginning of the month.

c$.$ During the past month, $1,400$ haurs of labst tme were recorded in the lab at a coat of $$14,700.$

d$.$ The lab's variable overhed cost last monch toraled $59,800.$

Velley View Hospital has never used standard costs. By searching industry iterature, hawever, you have determined the follawing nationwide averages for haspital labs:

Plates: Ihree plates are required per lab test Theie plates cost $$3\mathrm{.}25$ each and are disposed of after the fest is complesed. cost of this lab time is $$1140$ por hour.

Overhead Ovprhead cost is based on diect labon hours. The average rate for variable overhead is $$5,50$ per hour.