The maternity wing of the city hospital has two types of patients: normal and ce

Question

The maternity wing of the city hospital has two types of patients: normal and cesarean. The standard quantities of labor and materials per delivery for 20X1 are: Normal Cesarean Direct materials (lbs.) 9.0 21 Nursing labor (hrs.) 2.5 5 The standard price paid per pound of direct materials is $10.00. The standard rate for labor is $16.00. Overhead is applied on the basis of direct labor hours. The variable overhead rate for maternity is $30.00 per hour, and the fixed overhead rate is $40.00 per hour. Actual operating data for 20X1 are as follows: a. Deliveries produced: normal, 4,000; cesarean, 8,000. b. Direct materials purchased and used: 200,000 pounds at $9.50—35,000 for normal maternity patients and 165,000 for the cesarean patients; no beginning or ending raw materials inventories. c. Nursing labor: 50,700 hours—10,200 hours for normal patients and 40,500 hours for the cesarean; total cost of labor, $580,350. Required: 1. Prepare a standard cost sheet showing the unit cost per delivery for each type of patient. 2. Compute the materials price and usage variances for each type of patient. Prepare a standard cost sheet showing the unit cost per delivery for each type of patient. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Round costs to two decimal places3. Compute the labor rate and efficiency variances for each type of patient.Standard price, standard usage,standard cost.

Explanation / Answer

Direct Cesarean UOM Direct Material Lb 9 21 Nursing Labor hr 2.5 5 Standard price / material $ 10 10 Standard price / labor $ 16 16 var overhead/hr $ 30 30 Fix overhead/hr $ 40 40 Total material cost/patient $ 90 210 Total labor cost/ Patient $ 40 80 Variable OH $ 75 150 Fixed OH $ 100 200 Standard cost Total Cost/Patient $ 305 640 Actual operation Nos 4000 8000 Direct Material to consume lb 36000 168000 Actual Material Consumed lb 35000 165000 Usage Variance Lb 1000 3000 Price per material $ 9.5 9.5 Actual price paid for material ($9.5*material consumed) $ 332500 1567500 Standard price recovered ($10*material to be consumed) $ 360000 1680000 Material Variance 27500 112500 Actual Nursing labor hr 10200 40500 Should be nursing hour as per standard hour 10000 40000 Labor hour Variance Hr 200 500 Labor cost (Std price/labor*labor hr) $ 163200 648000 Total Should be labor cost $ 811200 Actual Labor cost $ 580350 Labor rate variance $ 230850

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