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 Nursing labor (hrs.) ----2.5- 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. -21 5 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. 3. Compute the labor rate and efficiency variances for each type of patient. 4. 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?
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 Nursing labor (hrs.) ----2.5- 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. -21 5 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. 3. Compute the labor rate and efficiency variances for each type of patient. 4. 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?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text: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
Nursing labor (hrs.) -------2.5-
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.
-21
5
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.
3. Compute the labor rate and efficiency variances for each type of patient.
4. 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?
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