Direct Labor Standards for Nonmanufacturing Expenses
St. Luke Hospital began using standards to evaluate its Admissions Department. The standard was broken into two types of admissions as follows:
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Type of Admission
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Standard Time to Complete
Admission Record
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Unscheduled admission
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30 min.
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Scheduled admission
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10 min.
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The unscheduled admission took longer, since name, address, and insurance information needed to be determined at the time of admission. Information was collected on scheduled admissions prior to the admissions, which was less time consuming.
The Admissions Department employs four full-time people (40 productive hours per week, with no overtime) at $21.00 per hour. For the most recent week, the department handled 176 unscheduled and 480 scheduled admissions.
a. How much was actually spent on labor for the week?
$
b. What are the standard hours for the actual volume for the week (round to the nearest whole hour)?
hours
c. Calculate the time variance. In your computation, round the standard direct labor rate to the nearest whole cent. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
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Time variance
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$
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Select Favorable Unfavorable Item 4
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