Direct Labor Standards for Nonmanufacturing Expenses St. Luke Hospital began usi

Question

Direct Labor Standards for Nonmanufacturing Expenses St. Luke Hospital began using standards to evaluate its Admissions Department. The standard was broken into two types of admissions as follows: Standard Time to Complete Admission Record Unscheduled admission 40 min. Scheduled admission 20 min. The unscheduled admission took longer, since name, address, and insurance information needed to be determined at the time of admission. Information was collected on scheduled admissions prior to the admissions, which was less time consuming. The Admissions Department employs two full-time people (40 productive hours per week, with no overtime) at $18.00 per hour. For the most recent week, the department handled 66 unscheduled and 126 scheduled admissions. How much was actually spent on labor for the week? What are the standard hours for the actual volume for the week (round to the nearest whole hour)? Hours Calculate the time variance. In your computation, round the standard direct labor rate to the nearest whole cent. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Time variance $

Explanation / Answer

a) Amount spent on labour during the week = 18 * 40 *2 = $ 1440

b) Std labour hours for actual volume:

                         unscheduled admissions   = 40*66 = 2640 minutes

                         scheduled admissions       = 20*126= 2520

                                                    Total                      5160 minutes = 86 hours

c) The time variance = (std time - actual time) * std rate per hour = (86-60) * 18 = $ 108 favourable variance

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.