Ee.47. Hart Labs, Inc. provides mad cow disease testing for both state and federal governmental agricultural agencies. Because thecompany's customers are governmental agencies, prices are strictly regulated. Therefore, Hart Labs must constantly monitor andcontrol its testing costs. Shown below are the standard costs for a typical test.Direct materials (2 test tubes @ $1.70 per tube)Direct labor (1 hour @ $32 per hour)Variable overhead (1 hour @ $7.00 per hour)Fixed overhead (1 hour @ $13.00 per hour)Total standard cost per testDirect materials (2,730 test tubes)Direct labor (1,339 hours)Variable overheadFixed overheadThe lab does not maintain an inventory of test tubes. As a result, the tubes purchased each month are used that month. Actual activityfor the month of November 2020, when 1,300 tests were conducted, resulted in the following.(a)Materials price varianceMaterials quantity varianceLabor price varianceLabor quantity variance$$$4,368Monthly budgeted fixed overhead is $18,460. Revenues for the month were $84,500, and selling and administrative expenses were$3,600.$41,509$8,580Compute the price and quantity variances for direct materials and direct labor.$3.4016,21132.007.0013.00$55.40

The price variation of an item is calculated by multiplying the difference between the real unit…

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 @ $1.70 per tube) Direct labor (1 hour @ $32 per hour) Variable overhead (1 hour @ $7.00 per hour) Fixed overhead (1 hour @ $13.00 per hour) Total standard cost per test Direct materials (2,730 test tubes) Direct labor (1,339 hours) Variable overhead Fixed overhead (a) 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 1,300 tests were conducted, resulted in the following. Materials price variance Materials quantity variance Labor price variance Labor quantity variance $ $ $4,368 Monthly budgeted fixed overhead is $18,460. Revenues for the month were $84,500, and selling and administrative expenses were $3,600. $ 41,509 $ 8,580 Compute the price and quantity variances for direct materials and direct labor. $3.40 16,211 32.00 7.00 13.00 $55.40

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 @ $1.70 per tube) Direct labor (1 hour @ $32 per hour) Variable overhead (1 hour @ $7.00 per hour) Fixed overhead (1 hour @ $13.00 per hour) Total standard cost per test Direct materials (2,730 test tubes) Direct labor (1,339 hours) Variable overhead Fixed overhead (a) 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 1,300 tests were conducted, resulted in the following. Materials price variance Materials quantity variance Labor price variance Labor quantity variance $ $ $4,368 Monthly budgeted fixed overhead is $18,460. Revenues for the month were $84,500, and selling and administrative expenses were $3,600. $ 41,509 $ 8,580 Compute the price and quantity variances for direct materials and direct labor. $3.40 16,211 32.00 7.00 13.00 $55.40

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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