Answered

Westonci.ca is your trusted source for finding answers to all your questions. Ask, explore, and learn with our expert community. Connect with professionals on our platform to receive accurate answers to your questions quickly and efficiently. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform.

The Foster Insurance Company developed standard times for processing claims. When a claim was received at the processing center, it was first reviewed and classified as simple or complex. The standard time for processing was:
simple claim - 36 mins
complex claim - 1.25 hrs
Employees were expected to be productive 7.5 hrs per day. Compensation costs were $135 per day per employee. During July, which had 20 working days, the following number of claims were processed:
simple claims - 3,000 processed
complex claims - 960 processed
REQUIRED
a. Calculate the number of workers that should have been available to process July claims.
b. Assume that 23 workers were actually available throughout the month of july. calculate a labor efficiency variance expressed as both a number of workers and a dollar amount for the month.

Sagot :

Tundexi

Answer:

Time Needed In Minutes

Simple Claim          36  

Complex Claims 75 (1.25 hour*60 Min)

Productive hours = 7.5 hrs. (In Minutes)

= 7.5 hours*60 min

= 450 minutes

Number of Working days = 20. Total Number of Productive Minutes in Month per person = 20 days * 450 minutes = 9000 minutes

Total Claims          Processed      Time Needed     Total Time

Simple Claim            3000                   36                   108000

Complex Claims       960                     75                    72000

Total                                                                              180000

a. Number of Workers needed = Total Time Needed / Productive time put by single worker = 180,000 / 9000 = 20 workers

b.  Number of Workers 23

    Standard                  20

Variance, Number of Workers = 23 - 20

Variance, Number of Workers = 3

Variance, Dollar Amount = Number of Workers * $135 * 20 days

Variance, Dollar Amount = $8,100

Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.