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P11-11		See pg 421 for formula and example.
	Northwest Medical Testing
	Clients per month	1500	clients
	Std time for blood sample	20	minutes
	Std wage for Technician	$40.00	per hour
	Total August activity
	Clients in month	1250	clients
	Time for blood samples	425	hours
	Tech total wages	$22,100	for month
a.	Calculate the labor rate variance for August. Indicate if favorable or unfavorable.		(AR - SR) AH
b.	Calculate the labor efficiency variance for August. Indicate if favorable or unfavorable.		(AH - SH) SR
c.	Given the following analysis ....
	Although the labor rate variance is relatively large, its cause is fairly obvious. It is not surprising that the company would need to pay a relatively high wage rate to a temporary worker with the skills to draw and prepare blood samples. As only 425 hours of work were performed in the month, it appears that the lab had only two full-time employees. Based on $60 per hour for one of them and $40 per hour for the other, and assuming that each worked an equal number of hours, the expected total cost at an average rate of $50 [($60 + 40) 2] is $21,250.
	Do labor costs for technicians apprear to be out of line (out of control), or reasonable given the need to hire a temp.?

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