Longview Hospital Performs Blood Tests in Its Laboratory

Multiple Choice

Longview Hospital performs blood tests in its laboratory. The following standards have been set for each blood test performed:


During May, the laboratory performed 1,500 blood tests. On May 1 there were no direct materials (plates) on hand; after a plate is used for a blood test it is discarded. Variable overhead is assigned to blood tests on the basis of standard direct labor-hours. The following events occurred during May:

• 3,600 plates were purchased for $9,540
• 3,200 plates were used for blood tests
• 340 actual direct labor-hours were worked at a cost of $5,550

The direct materials purchases variance is computed when the materials are purchased.

-The variable overhead efficiency variance for May is

A) $350 F
B) $350 U
C) $280 U
D) $280 F