Accounting for Decision Making and Control 7th Edition by Jerold Zimmerman

Exercise 9

Marian Health Care System
Marian Health Care is a large hospital system outside Chicago that offers both hospital (inpatient) and clinic (outpatient) services. It has a centralized admissions office that admits and registers clients, some of whom are seeking inpatient hospital services and others outpatient services. Marian uses a standard cost system to control its labor costs. The standard labor time to admit an inpatient is 15 minutes. Outpatient admissions have a standard labor time of 9 minutes. The standard wage rate for admissions agents is $14.50 per hour. During the last week, the admissions office admitted 820 inpatients and 2,210 outpatients. Actual hours worked by the admissions agents last week were 540 hours, and their total wages paid were $8,235.
Required:
a. Prepare a financial report that summarizes the operating performance (including the efficiency) of the admissions office for last week.
b. Based on the financial report you prepared in (a), write a short memo summarizing your findings and conclusions from this report.