1 normal delivery

standard price standard usage standard cost

D.M. 10 9 90
D.L. 16 2.5 40
variable overhead 30 2.5 75
fixed overhead 40 2.5 100
unit cost 305

cesarean delivery
standard price standard usage standard cost
D.M. 10 21 210
D.L. 16 5 80
variable overhead 30 5 150
fixed overhead 40 5 200
unit cost 640

2
normal
MPV = (actual price - standard price) * actual quantity
MPV = (9.50-10) * 35,000
MPV = -17,500

cesarean
MPV = (actual price - standard price) * actual quantity
MPV = (9.50-10) * 165,000
MPV = -82,500

normal
MUV= (actual quantity-standard quantity)*standard production
MUV= (35,000 - (9 * 4,000)) * 10
MUV= -10,000

cesarean
MUV= (actual quantity-standard quantity)*standard production
MUV= (165,000 - (21 * 8,000)) * 10
MUV= -30,000
3
normal
LRV= (actual rate-standard rate)*actual hours
LRV= (11.45 - 16) * 10,200
LRV= -46,410

cesarean
LRV= (actual rate-standard rate)*actual hours
LRV= (11.45 - 16) * 40,500
LRV= -184,275

normal
LEV= (actual hours-standard hours)*standard rate
LEV= (10,200 - (2.5 * 4,000)) * 16
LEV= 3,200

cesarean
LEV= (actual hours-standard hours)*standard rate
LEV= (40,500 - (5 * 8,000)) * 16
LEV= 8,000

5
a

DRG stands for diagnosis-related group. Medicare's DRG

system is called the Medicare severity diagnosis-related group,
or MS-DRG, which is used to determine hospital payments
under the inpatient prospective payment system (IPPS). It's
the system used to classify various diagnoses for inpatient
hospital stays into groups and subgroups so that Medicare can
accurately pay the hospital bill.

The system was created in the early 1970s by Robert Barclay

Fetter and John D. Thompson at Yale University with the
material support of the former Health Care Financing
Administration (HCFA), now called the Centers for Medicare &
Medicaid Services (CMS).
 The system was created in the early 1970s by Robert Barclay
Fetter and John D. Thompson at Yale University with the
material support of the former Health Care Financing
Administration (HCFA), now called the Centers for Medicare &
Medicaid Services (CMS).

standard costing help the hospital in calculating their

variations in costs. It can used to know the difference between
the actual and budgeted expenditure.
50,000
1
calculate the costs of lether

num. of units 92,000

stadard rate 12
total cost 1,104,000

D.L

num. of units 92,000

stadard rate 9
total cost 828,000

2
MBV

budgeted cost 1,104,000

actual cost 1,035,000
MBV 69,000

actual cost of material

num. of strips purchased 287,500

actual rate 3.6
material cost 1,035,000

LBV

budgeted cost 828,000

actual cost 977,500
LBV (149,500)

actual labor cost

 num. of hours 78,200
actual rate 12.5
actual cost 977,500

actual rate for material is lower than the budgeted rate Because of the discount on
purchace. The total budget labor variance is unfavorable which shows that actual
labor cost is more than budgeted cost. There is more actual labor hours than the
budgeted hours.