John Fleming, chief administrator for a district hospital, is concerned about costs for tests in the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
John Fleming, chief administrator for a district hospital, is concerned about costs for tests in the hospital's lab. Fleming has asked you to evaluate costs for the past month. The following information is available: a. Basically, two types of tests are performed in the lab-blood tests and smears. During the past month, 2,880 blood tests and 3,840 smears were performed in the lab. b. Small glass plates are used in both types of tests. During the past month, the hospital purchased 19,200 plates at a cost of $39,360. This cost is net of a 6% quantity discount. 1,920 of these plates were still on hand unused at the end of the month; there were no plates on hand at the beginning of the month. c. During the past month, 1,750 hours of labour time were recorded in the lab. The cost of this labour time was $20,650. d. Variable overhead cost last month in the lab for utilities and supplies totalled $10,675. The hospital has never used standard costs. By searching industry literature, however, you have determined the following nationwide averages for hospital labs: Plates: Labour: Overhead: Two plates are required per lab test. These plates cost $2.20 each and are disposed of after the test is completed. Each blood test should require 0.30 hour to complete, and each smear should require 0.15 hour to complete. The average cost of this lab time is $14.00 per hour. Overhead cost is based on direct labour-hours. The average rate for variable overhead is $5.00 per hour. Fleming would like a complete analysis of the cost of plates, labour, and overhead in the lab for the last month so that he can get to the root of the lab's cost problem. Compute a materials price variance for the plates purchased last month and a materials quantity variance for the plates used last month. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) 2. For labour cost in the lab: a. Compute a labour rate variance and a labour efficiency variance. (Do not round intermediate calculations. Round "Efficiency variance" answer to 2 decimal places. Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) b. This part of the question is not part of your Connect assignment. 3-a. Compute the variable overhead spen 1 of 7 iency variances. (Do not round intermediate calculations. Round "E iance" answer to 2 decimal places. Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance.).) John Fleming, chief administrator for a district hospital, is concerned about costs for tests in the hospital's lab. Fleming has asked you to evaluate costs for the past month. The following information is available: a. Basically, two types of tests are performed in the lab-blood tests and smears. During the past month, 2,880 blood tests and 3,840 smears were performed in the lab. b. Small glass plates are used in both types of tests. During the past month, the hospital purchased 19,200 plates at a cost of $39,360. This cost is net of a 6% quantity discount. 1,920 of these plates were still on hand unused at the end of the month; there were no plates on hand at the beginning of the month. c. During the past month, 1,750 hours of labour time were recorded in the lab. The cost of this labour time was $20,650. d. Variable overhead cost last month in the lab for utilities and supplies totalled $10,675. The hospital has never used standard costs. By searching industry literature, however, you have determined the following nationwide averages for hospital labs: Plates: Labour: Overhead: Two plates are required per lab test. These plates cost $2.20 each and are disposed of after the test is completed. Each blood test should require 0.30 hour to complete, and each smear should require 0.15 hour to complete. The average cost of this lab time is $14.00 per hour. Overhead cost is based on direct labour-hours. The average rate for variable overhead is $5.00 per hour. Fleming would like a complete analysis of the cost of plates, labour, and overhead in the lab for the last month so that he can get to the root of the lab's cost problem. Compute a materials price variance for the plates purchased last month and a materials quantity variance for the plates used last month. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) 2. For labour cost in the lab: a. Compute a labour rate variance and a labour efficiency variance. (Do not round intermediate calculations. Round "Efficiency variance" answer to 2 decimal places. Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) b. This part of the question is not part of your Connect assignment. 3-a. Compute the variable overhead spen 1 of 7 iency variances. (Do not round intermediate calculations. Round "E iance" answer to 2 decimal places. Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance.).)
Expert Answer:
Answer rating: 100% (QA)
Answer 1 Materials Price Variance Actual quantity purchased 19200 plates Actual cost per plate 39360 ... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0077522940
15th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these human resource management questions
-
A payment to a credit supplier for 65 has been posted as DR Bank 65, CR Payables 65 (+ CR Supplier account 65). What is the journal to correct this? DEBIT/CREDIT VALUE 130 130 DEBIT Payables CREDIT...
-
Marc Goudreau, administrator of Clearwater Hospital, was puzzled by the prior month s reports. Every month, its anyones guess whether the lab will show a profit or a loss. Perhaps the only answer is...
-
Write a method to take an integer array as a parameter and return how many elements having the same digits in each element in the array for example if we have array 1 1 , 4 4 , 1 4 , 2 3 , 1 2 , 5 6...
-
A tennis ball is thrown horizontally from an elevation of 14.0 m above the ground with a speed of 20.0 m/s. (a) Where is the ball after 1.60 s? (b) If the ball is still in the air, how long before it...
-
a. Calculate the effective annual cost of forgoing the discount from credit terms of 2/15 net 40. The selling price is $600. b. Another supplier offers $620 on credit terms of net 60. If you could...
-
Discuss the role of culture in HRIS implementation. How might two different organizations with very different cultures approach the same HRIS implementation differently?
-
1. Using the following information, compute the cost of direct materials used. Raw materials inventory, January 1 ........ $30,000 Raw materials inventory, December 31 ...... $60,000 Work in process,...
-
Calculate the following based on: Arithmetic Mean Company stock 13.21% return Inflation 4.55% Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal...
-
(a) Mr. Danial is a tax resident in Malaysia for the year of assessment 2021. He works as an auditor in Johor Bharu and earned the income of RM120,000 during the year. He received the allowance of...
-
See the below data: Respondent Gender Height Weight Age 1 F 63.30 156.30 Less than 18 years 2 F 57.00 100.70 Less than 18 years 3 M 63.00 156.30 Less than 18 years 4 M 71.00 237.10 Less than 18 years...
-
A square footing of size 8 8 m is founded at a depth of 2 m below the ground surface in loose to medium dense sand. Standard penetration tests conducted at the site gave the following corrected N60...
-
A property could be sold today for $2.08 million. It has a loan balance of $1.16 million and, if sold, the investor would incur a capital gains tax of $266,000. The investor has determined that if it...
-
2. You plan on retiring in 30 years and believe it is time to start making annual contributions to a retirement account. (a) How much will you have in your retirement account if you deposit $2800...
-
1. You have some savings in a bank which is earning a 3.5% rate of interest. You want to begin a retirement fund for yourself by investing in the stock market. You believe you will need $350,000 to...
-
A diode has a doping of ND = 1020/cm3 on the n-type side and NA = 1018/cm3 on the p-type side. What are the values of wdo and j? What is the value of wd at a reverse bias of 5 V? At 25 V?
-
Assume you are the accountant for Catalina Industries. John Catalina, the owner of the company, is in a hurry to receive the financial statements for the year ended December 31, 20X1, and asks you...
-
In his book Capitalism and Freedom, economist Milton Friedman wrote on page 133: There is one and only one social responsibility of businessto use its resources and engage in activities designed to...
-
The Hard Rock Mining Company is developing cost formulas for management planning and decision-making purposes. The companys cost analyst has concluded that utilities cost is a mixed cost, and he is...
-
The Ramon Company is a manufacturer that is interested in developing a cost formula to estimate the fixed and variable components of its monthly manufacturing overhead costs. The company wishes to...
-
Is the square of the "delta function" a distribution? If so, prove it using Dirac's bra-ket notation.
-
Show how \(\delta^{\prime \prime}(x-y)\) (the second derivative with respect to \(x\) ) acts as a distribution on functions.
-
Suppose that the probability of finding some particle 1 at \(x_{1}\) is a Gaussian around \(x_{1}\), with standard deviation \(\sigma_{1}\), and the probability of finding another particle 2 at...
Study smarter with the SolutionInn App