Longview Hospital Performs Blood Tests in Its Laboratory

question 168

Multiple Choice

Longview Hospital performs blood tests in its laboratory. The following standards have been set for each blood test performed: During May, the laboratory performed 1,500 blood tests. On May 1 there were no direct materials (plates) on hand; after a plate is used for a blood test it is discarded. Variable overhead is assigned to blood tests on the basis of standard direct labor-hours. The following events occurred during May: • 3,600 plates were purchased for $9,540
• 3,200 plates were used for blood tests
• 340 actual direct labor-hours were worked at a cost of $5,550
The direct materials purchases variance is computed when the materials are purchased.
The variable overhead efficiency variance for May is:

• A)$350 F
• B)$350 U
• C)$280 U
• D)$280 F

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Definitions:

Order Fulfillment Centre

is a specialized facility for processing and shipping orders to customers, handling the storage, picking, packing, and shipping of products.

Factor Weights

Numbers assigned to variables based on their importance, used in mathematical models and decision-making processes to reflect the relative significance of different factors.

Variable Cost

Charges that adjust in relation to the amount of goods produced or level of enterprise activity.