Longview Hospital Performs Blood Tests in Its Laboratory

question 56

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 materials price variance for May is:

• A)$360 F
• B)$360 U
• C)$740 F
• D)$740 U

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