Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Exercise 17

Direct labor standards for nonmanufacturing expenses
Englert Hospital began using standards to evaluate its Admissions Department. The standard was broken into two types of admissions as follows:

The unscheduled admission took longer because name, address, and insurance information needed to be determined and verified at the time of admission. Information was collected on scheduled admission 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 $15 per hour. For the most recent week, the department handled 140 unscheduled and 350 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
c. Calculate a time variance, and report how well the department performed for the week.