1
answer
0
watching
92
views
maroongnu586Lv1
28 Sep 2019
Farm Labs, Inc. provides mad cow disease testing for both state andfederal governmental agricultural agencies. Because the company'scustomers are governmental agencies, prices are strictly regulated.Therefore, Farm Labs must constantly monitor and control itstesting costs. Shown below are the standard costs for a typicaltest.
Direct materials (2 test tubes @ $1.50 per tube) $3
Direct labor (1 hour @ $25 per hour) 25
Variable overhead (1 hour @ $5 per hour) 5
Fixed overhead (1 hour @ $10 per hour) 10
Total standard cost per test $43
The lab does not maintain an inventory of test tubes. Therefore,the tubes purchased each month are used that month. Actual activityfor the month of November 2008, when 1,500 tests were conducted,resulted in the following:
Direct materials (3,050 test tubes) $ 4,270
Direct labor (1,600 hours) 36,800
Variable overhead 7,400
Fixed overhead 14,000
Monthly budgeted fixed overhead is $14,000. Revenues for the monthwere $75,000, and selling and administrative expenses were$4,000.
Compute the price and quantity variances for direct materials anddirect labor.
Materials price variance $ FavorableUnfavorable
Materials quantity variance $ UnfavorableFavorable
Labor price variance $ UnfavorableFavorable
Labor quantity variance $ UnfavorableFavorable
Compute the total overhead variance.
$ FavorableUnfavorable
Farm Labs, Inc. provides mad cow disease testing for both state andfederal governmental agricultural agencies. Because the company'scustomers are governmental agencies, prices are strictly regulated.Therefore, Farm Labs must constantly monitor and control itstesting costs. Shown below are the standard costs for a typicaltest.
Direct materials (2 test tubes @ $1.50 per tube) $3
Direct labor (1 hour @ $25 per hour) 25
Variable overhead (1 hour @ $5 per hour) 5
Fixed overhead (1 hour @ $10 per hour) 10
Total standard cost per test $43
The lab does not maintain an inventory of test tubes. Therefore,the tubes purchased each month are used that month. Actual activityfor the month of November 2008, when 1,500 tests were conducted,resulted in the following:
Direct materials (3,050 test tubes) $ 4,270
Direct labor (1,600 hours) 36,800
Variable overhead 7,400
Fixed overhead 14,000
Monthly budgeted fixed overhead is $14,000. Revenues for the monthwere $75,000, and selling and administrative expenses were$4,000.
Compute the price and quantity variances for direct materials anddirect labor.
Materials price variance $ FavorableUnfavorable
Materials quantity variance $ UnfavorableFavorable
Labor price variance $ UnfavorableFavorable
Labor quantity variance $ UnfavorableFavorable
Compute the total overhead variance.
$ FavorableUnfavorable
Direct materials (2 test tubes @ $1.50 per tube) $3
Direct labor (1 hour @ $25 per hour) 25
Variable overhead (1 hour @ $5 per hour) 5
Fixed overhead (1 hour @ $10 per hour) 10
Total standard cost per test $43
The lab does not maintain an inventory of test tubes. Therefore,the tubes purchased each month are used that month. Actual activityfor the month of November 2008, when 1,500 tests were conducted,resulted in the following:
Direct materials (3,050 test tubes) $ 4,270
Direct labor (1,600 hours) 36,800
Variable overhead 7,400
Fixed overhead 14,000
Monthly budgeted fixed overhead is $14,000. Revenues for the monthwere $75,000, and selling and administrative expenses were$4,000.
Compute the price and quantity variances for direct materials anddirect labor.
Materials price variance $ FavorableUnfavorable
Materials quantity variance $ UnfavorableFavorable
Labor price variance $ UnfavorableFavorable
Labor quantity variance $ UnfavorableFavorable
Compute the total overhead variance.
$ FavorableUnfavorable
Casey DurganLv2
28 Sep 2019