Longview Hospital Performs Blood Tests in Its Laboratory

question 19

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 labor rate variance for May is:

• A)$225 F
• B)$225 U
• C)$450 F
• D)$450 U

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Definitions:

Chart Of Accounts

An organized list of all accounts in a company's financial system, which is used to classify transactions.

Financial Statement Order

The sequence in which the key financial documents are prepared, typically including the income statement, balance sheet, statement of cash flows, and statement of retained earnings.

Debits And Credits

Fundamental accounting concepts that are used in double-entry bookkeeping, where debits must equal credits in every transaction.

Journal Entries

Accounting records that document all financial transactions in the order they occur, ensuring accurate tracking of business operations.