Variance Problems: Total Cost Incurred by Organizations

Variance Problems:
1. Last year the price for thermometer covers in a pediatrician’s office was $.05 each. This year, the covers cost $.06 each. If the office purchased 10,000 thermometer covers this year, what is the price variance? Is it favorable or unfavorable?
Price variance = (Present price – Old price) × Present quantity = _____________________ F or U ? 
2. Management has studied work patterns in the housekeeping department and estimates the number of hours to be worked as follows. Hours worked = (1,500 hours per month) + (0.50 × RVUs). For the coming month, management expects RVUs to be 5,800. What should budgeted labor for the month be?
Flexible Budget = Hours worked + (0.5 X RVUs) = ________________ Hours
3. Efficiency cost is a term that involves:
A. The amount of time that a problem goes uncorrected
B. Cost per unit of time
C. Probability the problem occurrence is correctable
D. All of the above.