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Insurance company application The Farrell 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 minutes Complex claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 .5 hours Employees were expected to be productive 7.5 hours per day. Compensation costs were $120 per day per employee. During November, which had 20 working days, the following number of claims were processed: Simple claims . . . . . . . . . . . . . . . . . . . . . . . . . . 3,600 processed Complex claims . . . . . . . . . . . . . . . . . . . . . . . . 800 processed Required: a. Calculate the number of workers that should have been available to process November claims. b. Assume that 22 workers were actually available throughout the month of November. Calculate a labor ef?ciency variance expressed as both a number of workers and a dollar amount for the month.
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