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##### Greenview Hospital operated at 120% of normal capacity in two

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Question;Greenview Hospital operated at 120% of normal capacity in two of its departments during the year. It operated 120% times 20,000 normal capacity direct labor nursing hours in routine services and it operated 120% times 20,000 normal capacity equipment hours in the laboratory. The lab allocates overhead by measuring minutes and hours the equipment is used, thus equipment hours.Assumptions:For Routine Services Nursing:_ 20,000 hours X 120% = 24,000 direct labor nursing hours._ Budgeted Overhead at 24,000 hours = \$42,000 fixed plus \$6,000 variable = \$48,000 total._ Actual Overhead at 24,000 hours = \$42,000 fixed plus \$7,000 variable = \$49,000 total._ Applied Overhead for 24,000 hours at \$2.35 = \$56,400.For Laboratory:_ 20,000 hours X 120% = 24,000 equipment hours._ Budgeted Overhead at 24,000 hours = \$59,600 fixed plus \$11,400 variable = \$71,000 total._ Actual Overhead at 24,000 hours = \$59,600 fixed plus \$11,600 variable = \$71,200 total._ Applied Overhead for 24,000 hours at \$3.455 = \$82,920.Questions:1. Set up a worksheet for applied overhead costs and volume variance with a column for Routine Services Nursing and a second column for Laboratory.2. Set up a worksheet for actual overhead costs and budget variance with a column for Routine Services Nursing and a second column for Laboratory.3. Set up a worksheet for volume variance and budget variance totaling net variance with a column for Routine Services Nursing and a second column for Laboratory.4. Insert input data from Assumptions.5. Complete computations for all three worksheets.

Paper#58362 | Written in 18-Jul-2015

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