(a)Compute the price and quantity variances for direct materials and direct labor.Materials price varianceMaterials quantity varianceLabor price varianceLabor quantity varianceeTextbook and MediaList of AccountsSave for Later$$$$+++Submit Answer Hart Labs, Inc. provides mad cow disease testing for both state and federal governmental agricultural agencies.Because the company's customers are governmental agencies, prices are strictly regulated. Therefore, Hart Labs mustconstantly monitor and control its testing costs. Shown below are the standard costs for a typical test.Direct materials (2 test tubes @ $1.90 per tube)Direct labor (1 hour @ $30 per hour)Variable overhead (1 hour @ $6.00 per hour)Fixed overhead (1 hour @ $12.00 per hour)Total standard cost per testDirect materials (2,310 test tubes)Direct labor (1,133 hours)Variable overheadFixed overhead$3.80$4,15832,8576,33612,67230.006.0012.00The lab does not maintain an inventory of test tubes. As a result, the tubes purchased each month are used that month.Actual activity for the month of November 2020, when 1,100 tests were conducted, resulted in the following.$51.80Monthly budgeted fixed overhead is $16,560. Revenues for the month were $73,700, and selling and administrativeexpenses were $4,900.

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Description: (a)Compute the price and quantity variances for direct materials and direct labor.Materials price varianceMaterials quantity varianceLabor price varianceLabor quantity varianceeTextbook and MediaList of AccountsSave for Later$$$$+++Submit Answer Har

MATERIALS PRICE VARIANCE Direct Materials Price Variance is the difference between the actual and…

Business

Accounting

(a) Compute the price and quantity variances for direct materials and direct labor. Materials price variance Materials quantity variance Labor price variance Labor quantity variance eTextbook and Media List of Accounts Save for Later $ $ $ $ + + + Submit Answer

(a) Compute the price and quantity variances for direct materials and direct labor. Materials price variance Materials quantity variance Labor price variance Labor quantity variance eTextbook and Media List of Accounts Save for Later $ $ $ $ + + + Submit Answer

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

Topic Video

Question

(a)
Compute the price and quantity variances for direct materials and direct labor.
Materials price variance
Materials quantity variance
Labor price variance
Labor quantity variance
eTextbook and Media
List of Accounts
Save for Later
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$
$
$
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Submit Answer

Hart Labs, Inc. provides mad cow disease testing for both state and federal governmental agricultural agencies.
Because the company's customers are governmental agencies, prices are strictly regulated. Therefore, Hart Labs must
constantly monitor and control its testing costs. Shown below are the standard costs for a typical test.
Direct materials (2 test tubes @ $1.90 per tube)
Direct labor (1 hour @ $30 per hour)
Variable overhead (1 hour @ $6.00 per hour)
Fixed overhead (1 hour @ $12.00 per hour)
Total standard cost per test
Direct materials (2,310 test tubes)
Direct labor (1,133 hours)
Variable overhead
Fixed overhead
$3.80
$4,158
32,857
6,336
12,672
30.00
6.00
12.00
The lab does not maintain an inventory of test tubes. As a result, the tubes purchased each month are used that month.
Actual activity for the month of November 2020, when 1,100 tests were conducted, resulted in the following.
$51.80
Monthly budgeted fixed overhead is $16,560. Revenues for the month were $73,700, and selling and administrative
expenses were $4,900.

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Fischer Fabrication reported the following information concerning its direct materials: Direct materials purchased (actual) Standard cost of materials purchased Standard price tires actual amount of materials used Actual production Standard direct materials costs per unit produced Assume that Fischer Fabrication had no beginning finished goods inventory and only produced one product. A count of inventory showed that 4,552 units remained in the warehouse. $ 378,300 $361,500 $ 333,500 56,900 units $6 Required: a. Assume Fischer writes off all variances to Cost of Goods Sold. Prepare the entries Fischer would make to record and close out the variances. b. Assume Fischer prorates all variances to the appropriate accounts. Prepare the entries Fischer would make to record and close out the variances. Complete this question by entering your answers in the tabs below. Required A Required B Assume Fischer writes off all variances to Cost of Goods Sold. Prepare the entries Fischer would make to…
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Complete the standard cost variance analysis
а. Standard Cost per Unit for Direct Materials and Direct Labor b. Direct Materials Price Variance Wrong Direct Materials Quantity Variance Wrong Total Direct Materials Cost Variance Wrong с. Direct Labor Rate Variance Wrong Direct Labor (Time) Efficiency Variance Wrong Total Direct Labor Cost Variance Wrong