Reference no: EM132687124

Problem - Direct labor standards for nonmanufacturing expenses

Good Samaritan Hospital began using standards to evaluate its Admissions Department. The standard was broken into two types of admissions as follows:

Type of Admission - Standard Time to Complete Admission Record

Unscheduled admission - 40 min

Scheduled admission - 10 min

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 two full-time people (40 productive hours per week, with no overtime) at $12 per hour. For the most recent week, the department handled 60 unscheduled and 210 scheduled admissions.

Required -

a. How much was actually spent on labor for the week?

b. What are the standard hours for the actual volume for the week? Calculate a time variance, and report how well the department performed for the week.