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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Ee.47.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education