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Problem 10-43 Unit Costs, Multiple Products, Variance Analysis, Service Setting




Question;Problem 10-43;Unit Costs, Multiple Products, Variance Analysis, Service Setting;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 2013 are;The standard price paid per pound of direct;materials is $10. The standard rate for labor is $16. Overhead is applied on;the basis of direct labor hours. The variable overhead rate for maternity is;$30 per hour, and the fixed overhead rate is $40 per hour.;Actual operating data for 2013 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, $580,350.;Required;Hide;1. Prepare a standard cost sheet;showing the unit cost per delivery for each type of patient. If required;round your answers to one decimal place.;City;Hospital;Standard;Cost Sheet;Normal;Patient Delivery;Standard;Price;Standard;Usage;Standard;Cost;Direct materials;$;lbs.;$;Direct labor;hrs.;Variable overhead;hrs.;Fixed overhead;hrs.;Unit cost;$;Hide;City Hospital;Standard;Cost Sheet;Cesarean;Patient Delivery;Standard;Price;Standard;Usage;Standard;Cost;Direct materials;$;lbs.;$;Direct labor;hrs.;Variable overhead;hrs.;Fixed overhead;hrs.;Unit cost;$;2. Compute the materials;price and usage variances for each type of patient.;MPV - Normal;$;Select;Favorable;Unfavorable;Correct 2 of Item 3;MPV - Cesarean;$;Select;Favorable;Unfavorable;Correct 4 of Item 3;MUV - Normal;$;Select;Favorable;Unfavorable;Correct 6 of Item 3;MUV - Cesarean;$;Select;Favorable;Unfavorable;Correct 8 of Item 3;3. Compute the labor rate;and efficiency variances for each type of patient. If required, round average;rate in intermediate calculations to two decimal places. Round your final;answers to the nearest dollar.;LRV - Normal;$;Select;Favorable;Unfavorable;Correct 10 of Item 3;LRV - Cesarean;$;Select;Favorable;Unfavorable;Correct 12 of Item 3;LEV - Normal;$;Select;Favorable;Unfavorable;Correct 14 of Item 3;LEV - Cesarean;$;Select;Favorable;Unfavorable;Correct 16 of Item 3;4. Conceptual Connection;Assume that you know only the total direct materials used for both products and;the total direct labor hours used for both products. Can you compute the total;materials usage and labor efficiency variances?Select;Yes;No;Correct 17 of Item 3;Computations;MUV;$;Select;Favorable;Unfavorable;Correct 19 of Item 3;LEV;$;Select;Favorable;Unfavorable;Correct 21 of Item 3;5. Conceptual Connection;Standard costing concepts have been applied in the healthcare industry. For;example, diagnostic-related groups (DRGs) are used for prospective payments for;Medicare patients. Select a search engine (such as Yahoo! or Google), and;conduct a search to see what information you can obtain about DRGs. You might;try "Medicare DRGs" as a possible search topic. Write a memo that;answers the following questions;a.;What is a DRG?;b.;How are DRGs established?;c.;How many DRGs are used?;d.;How does the DRG concept;relate to standard costing concepts discussed in the chapter? Can hospitals use;DRGs to control their costs?;Explain.;The input in the box below will not be graded, but may be;reviewed and considered by your instructor.


Paper#42996 | Written in 18-Jul-2015

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