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The Flynn Insurance Company developed standard times for processing claims. When a claim was received at the processing cent was first reviewed and classified as simple or complex. The standard time for processing was: Simple claim Complex claim 30 minutes 2.5 hours Employees were expected to be productive 8.5 hours per day. Compensation costs were $91 per day per employee. During November, which had 22 working days, the following number of claims were processed: Simple claims Complex claims 3,150 processed 660 processed

The Flynn Insurance Company developed standard times for processing claims. When a claim was received at the processing cent was first reviewed and classified as simple or complex. The standard time for processing was: Simple claim Complex claim 30 minutes 2.5 hours Employees were expected to be productive 8.5 hours per day. Compensation costs were $91 per day per employee. During November, which had 22 working days, the following number of claims were processed: Simple claims Complex claims 3,150 processed 660 processed

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Flynn Insurance Company developed standard times for processing claims. When a claim was received at the processing center, was first reviewed and classified as simple or complex. The standard time for processing was: Simple claim Complex claim 30 minutes 2.5 hours Employees were expected to be productive 8.5 hours per day. Compensation costs were $91 per day per employee. During November, which had 22 working days, the following number of claims were processed: Simple claims Complex claims 3,150 processed 660 processed Required: a. Calculate the number of workers that should have been available to process November claims. Note: Do not round intermediate calculations. b. Assume that 20 workers were actually available throughout the month of November. Calculate a labor efficiency variance expressed as both a number of workers and a dollar amount for the month. Note: Round "Efficiency variance, in number of workers" to nearest whole number. Use the rounded number in subsequent calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Answer is complete but not entirely correct. 17 a. Number of workers b. Efficiency variance, in number of workers c. Efficiency variance, in dollar amount 30 U U $ $ (4,621) 33
Transcribed Image Text:The Flynn Insurance Company developed standard times for processing claims. When a claim was received at the processing center, was first reviewed and classified as simple or complex. The standard time for processing was: Simple claim Complex claim 30 minutes 2.5 hours Employees were expected to be productive 8.5 hours per day. Compensation costs were $91 per day per employee. During November, which had 22 working days, the following number of claims were processed: Simple claims Complex claims 3,150 processed 660 processed Required: a. Calculate the number of workers that should have been available to process November claims. Note: Do not round intermediate calculations. b. Assume that 20 workers were actually available throughout the month of November. Calculate a labor efficiency variance expressed as both a number of workers and a dollar amount for the month. Note: Round "Efficiency variance, in number of workers" to nearest whole number. Use the rounded number in subsequent calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Answer is complete but not entirely correct. 17 a. Number of workers b. Efficiency variance, in number of workers c. Efficiency variance, in dollar amount 30 U U $ $ (4,621) 33
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