Jacqui Bassett, chief administrator for the city hospital, is concerned about costs for tests in the hospital's lab. Bassett has asked you o evaluate costs for the past month. The following information is available: a. Basically, two types of tests are performed in the lab: blood tests and smears. During the past month, 3,600 blood tests and 4,800 smears were performed in the lab. . Small glass plates are used in both types of tests. During the past month, the hospital purchased 24,000 plates at a cost of $58,800. This cost is net of a 6% quantity discount. 2,400 of these plates were still on hand unused at the end of the month; there were no plates on hand at the beginning of the month. c. During the past month, 2,150 hours of labour time were recorded in the lab. The cost of this labour time was $26,230. d. Variable overhead cost last month in the lab for utilities and supplies totalled $15,050. The hospital has never used standard costs. By searching industry literature, however, you have determined the following nationwide averages for hospital labs:

Jacqui Bassett, chief administrator for the city hospital, is concerned about costs for tests in the hospital's lab. Bassett has asked you o evaluate costs for the past month. The following information is available: a. Basically, two types of tests are performed in the lab: blood tests and smears. During the past month, 3,600 blood tests and 4,800 smears were performed in the lab. . Small glass plates are used in both types of tests. During the past month, the hospital purchased 24,000 plates at a cost of $58,800. This cost is net of a 6% quantity discount. 2,400 of these plates were still on hand unused at the end of the month; there were no plates on hand at the beginning of the month. c. During the past month, 2,150 hours of labour time were recorded in the lab. The cost of this labour time was $26,230. d. Variable overhead cost last month in the lab for utilities and supplies totalled $15,050. The hospital has never used standard costs. By searching industry literature, however, you have determined the following nationwide averages for hospital labs:

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 17E: Deepa Dalal opened a free-standing radiology clinic. She had anticipated that the costs for the...

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