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# The maternity wing of the city hospital has two types of patients normal and caesarean The standard quantities of labour and materials per delivery for 2011 are Normal Caesarean Direct materials

The maternity wing of the city hospital has two types of patients: normal and caesarean. The standard quantities of labour and materials per delivery for 2011 are:

Normal Caesarean

Direct materials (kg) 8 20

Nursing labour (hrs.) 2 4

The standard price paid per kilogram of direct materials is \$10. The standard rate for labour is \$16. Overhead is applied on the basis of direct labour hours. The variable overhead rate for maternity is \$30 per hour, and the fixed overhead rate is \$40 per hour.

Actual operating data for 2011 are as follows:

a. Patient days produced: normal, 3,500; caesarean, 7,000.

b. Direct materials purchased and used: 172,000 kilograms at \$9.50-30,000 for normal maternity patients and 142,000 for the caesarean patients; no beginning or ending raw materials inventories.

c. Nursing labour: 36,500 hours - 7,200 hours for normal patients and 29,300 hours for the caesarean; total cost of labour, \$580,350.

Required:

1. Prepare a standard cost sheet showing the unit cost per patient day for each type of patient.

2. Compute the materials price and usage variances for each type of patient.

3. Compute the labour rate and efficiency variances.

4. Assume that you know only the total direct materials used for both procedures and the total direct labour hours used for both procedures. Can you compute the total materials usage and labour efficiency variances? Explain.

Feb 09 2020 View more View Less