John Fleming, chief administrator for Valley View Hospital, is concerned about the costs for tests in the hospital’s lab. Charges for lab tests are consistently higher at Valley View than at other hospitals and have resulted in many complaints. Also, because of strict regulations on amounts reimbursed for lab tests, payments received from insurance companies and governmental units have not been high enough to cover lab costs. Mr. Fleming has asked you to evaluate costs in the hospital’s lab for the past month. The following information is available: Two types of tests are performed in the lab—blood tests and smears. During the past month, 1,800 blood tests and 2,400 smears were performed in the lab. Small glass plates are used in both types of tests. During the past month, the hospital purchased 12,000 plates at a cost of $56,400. 1,500 of these plates were unused at the end of the month; no plates were on hand at the beginning of the month. During the past month, 1,150 hours of labor time were recorded in the lab at a cost of $21,850. The lab’s variable overhead cost last month totaled $7,820. Valley View Hospital has never used standard costs. By searching industry literature, however, you have determined the following nationwide averages for hospital labs: Plates: Two plates are required per lab test. These plates cost $5.00 each and are disposed of after the test is completed. Labor: Each blood test should require 0.3 hours to complete, and each smear should require 0.15 hours to complete. The average cost of this lab time is $20 per hour. Overhead: Overhead cost is based on direct labor-hours. The average rate for variable overhead is $6 per hour. Required: 1. Compute a materials price variance for the plates purchased last month and a materials quantity variance for the plates used last month. 2. For labor cost in the lab: a. Compute a labor rate variance and a labor efficiency variance. b. In most hospitals, one-half of the workers in the lab are senior technicians and one-half are assistants. In an effort to reduce costs, Valley View Hospital employs only one-fourth senior technicians and three-fourths assistants. Would you recommend that this policy be continued? 3-a. Compute the variable overhead rate and efficiency variances. 3-b. Is there any relation between the variable overhead efficiency variance and the labor efficiency variance?

QUESTION 16

Analyse the data below related to days survival following surgery from either stomach or lung cancer. What is the result of the Kolmogorov–Smirnov test for the patients who survived stomach cancer?

QUESTION 17

Run an independent t-test on the data in Q16. A Levene’s test result of p = .006 was obtained. What can we infer from this number?

QUESTION 18

What is the correct result for the independent t-test you calculated in Q17?

QUESTION 19

Assume that for the research into stomach and lung cancer the significance value is set at p < .05 and an independent t-test yielded a significance value of p = .06. What should you do?

QUESTION 20

What is the effect size for the cancer survival data?

Use this extract taken from the article, “L-Glutamine changes gut bacteria leading to weight loss,” (appeared in Preventdisese.com on November 2, 2019) to answer the questions that follow:

L-Glutamine is the most common amino acid found in your muscles and it plays a key role in protein metabolism, and the ability to secrete human growth hormone, which helps metabolize body fat and support new muscle growth. Researchers have now found that a daily L-glutamine dose of 30 grams per day was associated with a significant reduction in the ratio of specific biomarkers for obesity. The 30g dose studied was associated with a significant reduction in the ratio of Firmicutes to Bacteroidetes in obese and overweight people. “The finding that L-glutamine promotes changes in the gut microbiota composition provides support for the importance of some nutrients in modulating the intestinal bacterial profile,” wrote the researchers in Nutrition. “These changes resembled the weight loss programs established in the literature”. A new study, albeit small scale and of limited duration, suggested that the amino acid L-glutamine may also have weight management potential by changing the bacterial composition in the gut. The Brazilian researchers did not observe any changes in body weight during their 14 day study, but noted that a longer intervention period “may result in metabolic changes”. The researchers recruited 33 overweight and obese adults, aged between 23 and 59 and randomly assigned them to receive supplements of L-glutamine or L-alanine for two weeks. A reduction of 0.3 was observed in the ratio of Firmicutes to Bacteroidetes in the L-glutamine group, they added (from 0.85 to 0.57), while L-alanine was associated with an increase from 0.91 to 1.12. “Thus, these findings suggest that oral supplementation of L-glutamine have similar effects on gut microbiota as weight loss,” said the researchers. “We would like to highlight that although the age range of the volunteers was large (23-59 years) and aging may have an effect on intestinal microbiota, the results obtained in this study were statistically significant”.

(a) Is the study by Brazilian researchers that was cited in this article observational or experimental? In less than 50 words clearly explain your choice based on the extract given above.

(b) Identify the variable(s) of interest.

(c) Explain explicitly what a confounding variable is. Identify one plausible confounding variable in this study, explain why it is a confounding variable and suggest a possible way to overcome the impact of the confounding variable.

(d) Is the conclusion from this particular study reflected in the title of the article appropriate? Justify your response.

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

John Fleming, chief administrator for Valley View Hospital, is concerned about the costs for tests in the hospital’s lab. Charges for lab tests are consistently higher at Valley View than at other hospitals and have resulted in many complaints. Also, because of strict regulations on amounts reimbursed for lab tests, payments received from insurance companies and governmental units have not been high enough to cover lab costs.

Mr. Fleming has asked you to evaluate costs in the hospital’s lab for the past month. The following information is available:

Two types of tests are performed in the lab—blood tests and smears. During the past month, 1,800 blood tests and 2,400 smears were performed in the lab.

Small glass plates are used in both types of tests. During the past month, the hospital purchased 12,000 plates at a cost of $56,400. 1,500 of these plates were unused at the end of the month; no plates were on hand at the beginning of the month.

During the past month, 1,150 hours of labor time were recorded in the lab at a cost of $21,850.

The lab’s variable overhead cost last month totaled $7,820.

Valley View Hospital has never used standard costs. By searching industry literature, however, you have determined the following nationwide averages for hospital labs:

Plates: Two plates are required per lab test. These plates cost $5.00 each and are disposed of after the test is completed.

Labor: Each blood test should require 0.3 hours to complete, and each smear should require 0.15 hours to complete. The average cost of this lab time is $20 per hour.

Overhead: Overhead cost is based on direct labor-hours. The average rate for variable overhead is $6 per hour.

Required:

1. Compute a materials price variance for the plates purchased last month and a materials quantity variance for the plates used last month.

2. For labor cost in the lab:

a. Compute a labor rate variance and a labor efficiency variance.

b. In most hospitals, one-half of the workers in the lab are senior technicians and one-half are assistants. In an effort to reduce costs, Valley View Hospital employs only one-fourth senior technicians and three-fourths assistants. Would you recommend that this policy be continued?

3-a. Compute the variable overhead rate and efficiency variances.

3-b. Is there any relation between the variable overhead efficiency variance and the labor efficiency variance?

QUESTION# 4      ( 20marks)

Marc Goudreau, administrator of Clearwater Hospital, was puzzled by the prior month's reports. “Every month, it's anyone's guess whether the lab will show a profit or a loss. Perhaps the only answer is to increase our lab fees again.”

“We can't,” replied Rhoda Groves, the controller. “There are still a lot of complaints about the last increase, particularly from the insurance companies and government health units. They are now paying only about 80% of what we bill. I'm beginning to think the problem is on the cost side.”

To determine if the Clearwater lab costs are in line with those of other hospital labs, Goudreau has asked you to evaluate the costs for the past month. Groves has provided you with the following information:

Two basic types of tests are performed in the lab—smears and blood tests. During the past month, 2,700 smears and 900 blood tests were performed in the lab.

Small glass plates are used in both types of tests. During the past month, the hospital purchased 16,000 plates at a cost of $38,400. This cost is net of a 4% purchase discount. A total of 2,000 of these plates were unused at the end of the month; no plates were on hand at the beginning of the month.

During the past month, 1,800 hours of labour time were used in performing smears and blood tests. The cost of this labour time was $18,450.

The lab's variable overhead cost last month totalled $11,700.

Fixed overhead cost last month totalled $10,400.

Clearwater Hospital has never used standard costs. By searching industry literature, however, you have determined the following nationwide averages for hospital labs:

Plates: Three plates are required per lab test. These plates cost $2.50 each and are disposed of after the test is completed.

Labour: Each smear should require 0.3 hours to complete, and each blood test should require 0.6 hours to complete. The average cost of this lab time is $12 per hour.

Required:

Compute the Materials Price Variance for the plates purchased last month, and compute a Materials Quantity Variance for the plates used last month.

For Labour Cost in the lab:

Compute a Labour Rate Variance and a Labour Efficiency Variance.

In most hospitals, three-quarters of the workers in the lab are certified technicians and one-quarter are assistants. In an effort to reduce costs, Clearwater Hospital employs only one-half certified technicians and one-half assistants. Would you recommend that this policy be continued? Explain.

1.Markham Company makes two products: Basic Product and Deluxe Product. Annual production and sales are 1,800 units of Basic Product and 1,400 units of Deluxe Product. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Basic Product requires 0.3 direct labor hours per unit and Deluxe Product requires 0.6 direct labor hours per unit. The total estimated overhead for next period is $99,585.

The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools—Activity 1, Activity 2, and General Factory—with estimated overhead costs and expected activity as follows:

(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor hours.)

The predetermined overhead rate (i.e., activity rate) for Activity 2 under the activity-based costing system is closest to:

a. $8.20.

b. $46.32.

c. $72.16.

d. $9.79.

2.South Beach Industries reports the following information about resources. At the beginning of the year, South Beach estimated it would spend $296,300 for materials, $48,500 for purchasing, $32,300 for setups, and $45,000 for repairs.

Compute unused resource capacity for repairs for South Beach.

a. $4,900.

b. $9,000.

c. $4,100.

d. $3,900.

3. The manufacturing overhead budget at Levetron Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,700 direct labor-hours will be required in August. The variable overhead rate is $9.20 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $143,990 per month, which includes depreciation of $25,640. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for August should be:

a.$9.20.

b. $27.90.

c.$24.57.

d.$18.70.

John Fleming, chief administrator for Valley View Hospital, is concerned about the costs for tests in the hospital’s lab. Charges for lab tests are consistently higher at Valley View than at other hospitals and have resulted in many complaints. Also, because of strict regulations on amounts reimbursed for lab tests, payments received from insurance companies and governmental units have not been high enough to cover lab costs. Mr. Fleming has asked you to evaluate costs in the hospital’s lab for the past month. The following information is available: Two types of tests are performed in the lab—blood tests and smears. During the past month, 1,800 blood tests and 2,400 smears were performed in the lab. Small glass plates are used in both types of tests. During the past month, the hospital purchased 12,000 plates at a cost of $56,400. 1,500 of these plates were unused at the end of the month; no plates were on hand at the beginning of the month. During the past month, 1,150 hours of labor time were recorded in the lab at a cost of $21,850. The lab’s variable overhead cost last month totaled $7,820. Valley View Hospital has never used standard costs. By searching industry literature, however, you have determined the following nationwide averages for hospital labs: Plates: Two plates are required per lab test. These plates cost $5.00 each and are disposed of after the test is completed. Labor: Each blood test should require 0.3 hours to complete, and each smear should require 0.15 hours to complete. The average cost of this lab time is $20 per hour. Overhead: Overhead cost is based on direct labor-hours. The average rate for variable overhead is $6 per hour. Required: 1. Compute a materials price variance for the plates purchased last month and a materials quantity variance for the plates used last month. 2. For labor cost in the lab: a. Compute a labor rate variance and a labor efficiency variance. b. In most hospitals, one-half of the workers in the lab are senior technicians and one-half are assistants. In an effort to reduce costs, Valley View Hospital employs only one-fourth senior technicians and three-fourths assistants. Would you recommend that this policy be continued? 3-a. Compute the variable overhead rate and efficiency variances. 3-b. Is there any relation between the variable overhead efficiency variance and the labor efficiency variance?